AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 2, 2009




REGISTRATION
NO.  333-______












UNITED
STATES


SECURITIES
AND  EXCHANGE COMMISSION


WASHINGTON,
DC 20549


------------------------------





FORM
S-3





REGISTRATION
STATEMENT


UNDER THE
SECURITIES ACT OF 1933


--------------------------------------





STEWARDSHIP
FINANCIAL CORPORATION


--------------------------------------------------


(Exact
name of registrant as specified in its charter)





NEW JERSEY
              22-3351447(State
      or other jurisdiction of\
              (IRS
      Employer Identification No.)incorporation
      or organization)





630
GODWIN AVENUE,


MIDLAND
PARK, NEW JERSEY  07432


201-444-7100


--------------------------------------------------------------------------------------


(Address,
Including Zip Code, and Telephone Number, Including


Area
Code, of Registrant’s Principal Executive Offices)





PAUL VAN
OSTENBRIDGE


STEWARDSHIP
FINANCIAL CORPORATION


630
GODWIN AVENUE


MIDLAND
PARK, NJ 07432-1405


(201)
444-7100


-----------------------------------------------------------------------------------------------


(Name,
Address, Including Zip Code, and Telephone Number, Including


Area
Code, of Registrant’s Agent for Service)





WITH A
COPY TO:


MICHELE
F. VAILLANT, ESQ.


MCCARTER
& ENGLISH


100
MULBERRY STREET


NEWARK,
NJ 07102-4096


973-622-4444





APPROXIMATE
DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  From time to
time after this registration statement becomes effective.




If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box.
[__]




If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]




If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [__]




1


If this
Form is a post-effective amendment filed pursuant to Rule 462 (c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier registration statement for the same offering.
[__]




If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box.  [__]




If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box.  [__]




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer’’ and
‘‘smaller reporting company’’ in Rule 12b–2 of the Exchange Act.




q  Large
      Accelerated Filer
              q  Accelerated
      Filerq  Non-Accelerated
      Filer (Do not check if a smaller reporting company)
              x  Smaller
      Reporting Company







CALCULATION
OF REGISTRATION FEE





Title
      of each class of
                        securities
      to be registered
                      Amount
      to be
                        registered
                      Proposed
      maximum
                        offering
      price per
                        share
                      Proposed
      maximum
                        aggregate
      offering
                        price
                      Amount
      of
                        registration
                        feeWarrant
      to Purchase
                        Common
      Stock and
                        underlying
      shares of
                        Common
      Stock, no par
                        value
                      127,119(1)
                      $11.80(2)
                      $1,500,004(2)
                      $83.70Total
                      127,119
                      
                      $1,500,004
                      $83.70









(1)
            There
      are being registered hereunder (a) a warrant initially for the purchase of
      127,119 shares of common stock which we issued to the United States
      Department of the Treasury (the “Treasury”) pursuant to the Treasury’s
      Troubled Asset Relief Program Capital Purchase Program, at an initial
      exercise price of $11.80 per share, (b) 127,119 shares of common stock
      issuable upon exercise of such warrant and (c) such additional number of
      shares of common stock of a currently indeterminable amount, as may from
      time to time become issuable by reason of stock splits, stock dividends
      and certain anti-dilution provisions set forth in the warrant, which
      shares of common stock are registered hereunder pursuant to Rule
      416.




(2)
            Calculated
      in accordance with Rule 457(i) with respect to the per share price
      exercise price of the warrant of
$11.80.









THE
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.









2


THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED.  THE SELLING SECURITYHOLDERS MAY NOT SELL THESE SECURITIES
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE.  THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE OR JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.




Subject
to Completion, Preliminary Prospectus dated March 2, 2009




PROSPECTUS




STEWARDSHIP
FINANCIAL CORPORATION




127,119
SHARES OF COMMON STOCK


AND A
WARRANT TO PURCHASE 127,119 SHARES OF COMMON STOCK





This
prospectus relates to the potential resale from time to time by selling
securityholders of a warrant (the “Warrant”), or portions thereof, which expires
on January 30, 2019, to purchase 127,119 shares of common stock, no par value
(the “Common Stock”) of Stewardship Financial Corporation (the “Corporation”),
at an exercise price of $11.80 per share, subject to adjustment as described in
this prospectus, and any shares of Common Stock issuable from time to time upon
exercise of the Warrant.  The Warrant and 10,000 shares of the
Corporation’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A, having
a per share liquidation preference  of $1,000, were issued by the
Corporation pursuant to a Letter Agreement dated January 30, 2009 and the
related Securities Purchase Agreement - Standard Terms (the “Securities Purchase
Agreement”) between the Corporation and the United States Department of the
Treasury as part of the Treasury’s Troubled Asset Relief Program (“TARP”)
Capital Purchase Program in a private placement exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities
Act”).  In this prospectus, we also refer to the United States
Department of the Treasury as the “Treasury” or the “initial selling
securityholder” and to the 10,000 shares of our Fixed Rate Cumulative Perpetual
Preferred Stock, Series A, as the “Series A Preferred Stock.”  We have
not registered the Series A Preferred Stock with the Securities and Exchange
Commission, and the selling securityholders may not use this prospectus for the
resale of the Series A Preferred Stock.




The
initial selling securityholder and its successors, including transferees, who
are collectively referred to in this prospectus as the “selling
securityholders,” may sell or otherwise dispose of the securities offered by
this prospectus.  The selling securityholders may offer the securities
from time to time directly or through underwriters, broker-dealers or agents and
in one or more public or private transactions and at fixed prices, at prevailing
market prices, at prices related to prevailing market prices or at negotiated
prices.  If these securities are sold through underwriters,
broker-dealers or agents, the selling securityholders will be responsible for
underwriting discounts or commissions or agents’ commissions, if
any.  We will not receive any proceeds from the sale of securities by
the selling securityholders.




Our
common stock is listed on the NASDAQ Capital Market under the symbol
“SSFN.”  On February 26, 2009, the closing sale price of our Common
Stock on the NASDAQ Capital Market was $8.00 per share.  Neither the
Series A Preferred Stock nor the Warrant is listed on any securities exchange
and we do not intend to seek such listing unless we are requested to do so by
the Treasury.




The
principal executive offices of the Corporation and its wholly owned subsidiary,
Atlantic Stewardship Bank, are located at 630 Godwin Avenue, Midland Park, New
Jersey 07432-1405.  The Corporation’s telephone number is (201)
444-7100.




INVESTING
IN OUR SECURITIES INVOLVES RISKS.  SEE THE “RISKS FACTORS” SECTION
BEGINNING ON PAGE 2 OF THIS PROSPECTUS.




THE
SECURITIES OFFERED BY THIS PROSPECTUS ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.




3


THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.




The date
of this Prospectus is [________], 2009.







4


TABLE
OF CONTENTS




PagePROSPECTUS
      SUMMARY
                                      1SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS
                                      2RISK
      FACTORS
                                      3USE
      OF PROCEEDS
                                      6DESCRIPTION
      OF WARRANT
                                      6DESCRIPTION
      OF CAPITAL STOCK
                                      8SELLING
      SECURITYHOLDERS
                                      13PLAN
      OF DISTRIBUTION
                                      14INCORPORATION
      OF CERTAIN DOCUMENTS BY REFERENCE
                                      16LEGAL
      MATTERS
                                      16EXPERTS
                                      16INDEMNIFICATION
                                      17DISCLOSURE
      OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT
      LIABILITIES
                                      17WHERE
      YOU CAN FIND MORE INFORMATION
                                      17

















i


PROSPECTUS
SUMMARY




Following is a summary of
information contained elsewhere in, or incorporated by reference into, this
prospectus.  This summary is not intended to provide you with all of
the information that you should consider before any investment in our
securities.  You should read carefully all of the information
contained in this prospectus as well as the documents incorporated by reference
into this prospectus..  See “Where You Can Find More Information”
regarding information incorporated by reference into this
prospectus.




This
prospectus is part of a “shelf” registration statement that we have filed with
the Securities and Exchange Commission (the “SEC”).  By using a shelf
registration statement, the selling securityholders may sell or otherwise
dispose of the securities covered by this prospectus, from time to time, in one
or more offerings.




We may
provide a prospectus supplement containing specific information about the terms
of a particular offering by the selling securityholders.  The
prospectus supplement may add, update or change information in this
prospectus.  If the information in this prospectus is inconsistent
with a prospectus supplement, you should rely on the information in that
prospectus supplement.  You should read this prospectus and, if
applicable, any prospectus supplement we provide as well as the additional
information described under the heading “Where You Can Find More Information”
before you invest.




You
should rely only on the information contained or incorporated by reference in
this prospectus and any supplement to this prospectus.  Neither us nor
the selling securityholders have authorized anyone to provide you with
information different from that contained in this prospectus.  If
anyone provides you with different or inconsistent information, you should not
rely on it.  The selling securityholders are offering to sell, and
seeking offers to buy, our securities only in jurisdictions where it is lawful
for them to do so.  You should not assume that the information
contained in this prospectus or any prospectus supplement is accurate on any
date subsequent to the date set forth on the front of such document or that any
information we have incorporated by reference is correct on any date subsequent
to the date of the document incorporated by reference, even though this
prospectus and any prospectus supplement is delivered or securities are sold on
a later date.  The Corporation’s business, financial condition,
results of operations and prospects may have changed since that
date.




All
references in this prospectus to “the Corporation,” “we,” “us,” “our,”
“Stewardship” or similar references mean Stewardship Financial Corporation and
its consolidated subsidiary unless otherwise stated or the context otherwise
requires.




Stewardship
Financial Corporation




Stewardship Financial Corporation is a
one-bank holding company, which was incorporated under the laws of the State of
New Jersey in January 1995 to serve as a holding company for Atlantic
Stewardship Bank (the “Bank”).  The only significant activity of the
Corporation is ownership and supervision of the Bank.   The Bank
is a commercial bank formed under the laws of the State of New Jersey on April
26, 1984.  The Bank conducts its business from its main office in
Midland Park, New Jersey, and its twelve branches located in Hawthorne,
Ridgewood, Montville, North Haledon, Pequannock, Waldwick, Wayne, Westwood and
Wyckoff, New Jersey.  The Corporation, through the Bank, conducts a
traditional commercial banking business and offers services to individuals and
businesses, including personal and business checking accounts and time deposits,
money market accounts and regular savings accounts.  We engage in a
wide range of lending activities and offer commercial, consumer, mortgage, home
equity and personal loans.   The Bank has incorporated a tithing
policy into its business and tithes 10% of its pre-tax profits to Christian and
local charities.




At September 30, 2008, the Corporation
had consolidated total assets of $610,137,000, deposits of $492,110,000,
borrowings of $62,872,000 and total shareholders’ equity of
$41,759,000.




The
principal executive offices of the Corporation and the Bank are located at 630
Godwin Avenue, Midland Park, New Jersey 07432-1405.  The Corporation’s
telephone number is (201) 444-7100.




The Corporation’s Common Stock is
traded on the NASDAQ Capital Market under the ticker symbol “SSFN.”




1


Securities
Being Offered




The
securities being offered by this prospectus consist of (i) a Warrant, or
portions thereof, which expires on January 30, 2019, to purchase 127,119 shares
of the Common Stock of the Corporation at an exercise price of $11.80 per share,
subject to adjustment as described herein, and (ii) any shares of Common Stock
issuable from time to time upon exercise of the Warrant.  The Warrant
was issued to the United States Department of the Treasury on January 30, 2009
when, pursuant to the Treasury’s TARP Capital Purchase Program, we sold to the
Treasury Department 10,000 shares of our Fixed Rate Cumulative Perpetual
Preferred Stock, Series A, liquidation preference amount $1,000 per share, for
an aggregate purchase price of $10,000,000.  The Warrant and the
Series A Preferred Stock were issued in a private placement exempt from the
registration requirements of the Securities Act.  The terms of the
Warrant, our Common Stock and the Series A Preferred Stock are described in this
prospectus under “Description of Warrant,” “Description of Capital
Stock  - Series A Preferred” and “Description ofCapital
Stock - Common Stock.”




SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS




This prospectus and the documents
incorporated by reference may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of
1995.  Forward-looking statements include those regarding our goals,
beliefs, plans or current expectations and other statements regarding matters
that are not historical facts.  For example, when we use words such as
“may,” “will,” “expect,” “intend”, “anticipate,” “believe,” “contemplate,”
“estimate,” “plan” and “continue” or similar words that convey uncertainty of
future events or outcomes, we are making forward-looking statements. You should
read statements that contain these words carefully because they discuss our
future expectations, contain projections of our future operating results or of
our financial condition, or state other “forward-looking”
information.   Because they are based on the Corporation’s
current expectations and assumptions,  forward-looking statements are
subject to various known and unknown risks,  uncertainties and other
factors that could cause our actual results to differ materially from the
expectations we describe in our forward-looking statements.  These
risk factors include:




·
            changes
      in general, economic and market conditions in New Jersey and the markets
      we serve any of which may affect our level of non-performing
      assets;




·
            demands
      for loans and deposits in our market
area;




·
            the
      timely development, introduction and acceptance of new banking-related
      products, services and
enhancements;




·
            changes
      in legislative and regulatory conditions that adversely affect our
      business, including possible changes to the terms and conditions of the
      Capital Purchase Program established by the Treasury; including changes to
      the letter agreement between the Corporation and the Treasury which
      changes the Treasury may make
unilaterally;




·
            the
      development of an interest rate environment that adversely affects our
      interest rate spread or other income anticipated from operations and
      investments; and




·
            management’s
      ability to manage these and other
risks.




Therefore,
in evaluating any forward-looking statement made by us, you should specifically
consider the various risks, uncertainties and events discussed in this
prospectus under the caption “Risk Factors” and elsewhere in this prospectus and
contained in the incorporated by reference documents.  The occurrence
of any or all of these risk factors could adversely impact our financial
condition and results of operation.




We caution you not to place undue
reliance on these forward-looking statements, which are based upon management’s
beliefs and assumptions at the time they are made.  Except to the
extent required by applicable securities laws and regulations, we undertake no
obligation to publicly update or revise any forward-looking statements included
or incorporated by reference in this prospectus to reflect new information,
events or circumstances after the date of this prospectus or to update the
reasons why actual results could differ from those contained in such
forward-looking statements.




2


RISK
FACTORS




An investment in our securities
involves significant risks.  The following discussion highlights the
risks management believes are material for the Corporation, but does not
necessarily include all the risks that we may face.  If any of these
events actually occurs, the business, financial condition, results of operations
or cash flows of the Corporation could be materially adversely affected, the
market price of the Corporation’s Common Stock could decline significantly, and
a shareholder could lose all or part of an investment in the Corporation’s
Common Stock.  You should carefully review these risk factors and
other information contained in this prospectus and the documents incorporated by
reference before making an investment decision regarding our
securities.  Our operations are subject to interest rate risk and
changes in interest rates may negatively affect our financial
performance.




Our operations are subject to
interest rate risk and changes in interest rates may negatively affect our
financial performance.




Our
earnings and cash flows are largely dependent upon our net interest
income.  Net interest income is the difference between interest income
earned on interest-earning assets, such as loans and securities, and interest
expense paid on interest-bearing liabilities, such as deposits and borrowed
money.  To be profitable we must earn more interest from our
interest-earning assets than we pay on our interest-bearing
liabilities.  Changes in the general level of interest rates may have
an adverse affect on our business, financial condition and results of
operation.  Interest rates are highly sensitive to many factors that
are beyond our control, including general economic conditions and the policies
of governmental and regulatory agencies such as the Federal Reserve
Bank.  Changes in monetary policy and interest rates can also
adversely affect our ability to originate loans and deposits, the fair value of
financial assets and liabilities, and the average duration of our assets and
liabilities.




Our
allowance for loan losses may be insufficient.





There are
inherent risks associated with our lending activities.  There are
risks inherent in making any loan, including dealing with individual borrowers,
nonpayment, uncertainties as to the future value of collateral and changes in
economic and industry conditions.   We attempt to mitigate and
manage credit risk through prudent loan underwriting and approval procedures,
monitoring of loan concentrations and periodic independent review of outstanding
loans.  We cannot be assured that these procedures will reduce credit
risk inherent in the business.




We make
various assumptions and judgments about the collectibility of our loan
portfolio, including the creditworthiness of our borrowers and the value of the
real estate and assets serving as collateral for loan repayments. In determining
the size of our allowance for loan loss, we rely on our experience and our
evaluation of economic conditions.  If our assumptions prove to be
incorrect, our current allowance may not be sufficient to cover probable
incurred loan losses and adjustments may be necessary to allow for different
economic conditions or adverse developments in our
portfolio.  Significant additions to our allowance for loan losses
would materially decrease our net income.




A
persistent, deepening economic recession and unstable financial markets have
adversely affected our industry and, because of our geographic concentration in
northern New Jersey, we could be impacted by adverse changes in local economic
conditions.





Our
success depends on the general economic conditions of the nation, the state of
New Jersey, and the Northern New Jersey area.  The nation’s current
economic recession and the related instability of the financial markets have
severely adversely affected the banking industry and may adversely affect our
business, financial condition, results of operations and stock
price.  We do not believe these difficult economic conditions are
likely to improve in the near future and if the efforts of the federal
government to stabilize the economy are unsuccessful the recession could
deepen.  Unlike larger banks that are more geographically diversified,
we provide financial services to customers primarily in the market areas in
which we operate.  The local economic conditions of these areas have a
significant impact on our commercial, real estate and construction loans, the
ability of our borrowers to repay these loans and the value of the collateral
securing these loans.  While we did not and do not have a sub-prime
lending program, any significant decline in the real estate market in our
primary market area would hurt our business and mean that collateral for our
loans would have less value. As a consequence, our ability to recover on
defaulted loans by selling the real estate securing the loan would
be




3


diminished
and we would be more likely to suffer losses on defaulted loans.  Any
of the foregoing events and conditions could have a material adverse effect on
our business, results of operations and financial condition.




Competition
within the financial services industry could adversely affect our
profitability.





We face
strong competition from banks, other financial institutions, money market mutual
funds and brokerage firms within the New York metropolitan area.  A
number of these entities have substantially greater resources and lending
limits, larger branch systems and a wider array of banking
services.  Competition among depository institutions for customer
deposits has increased significantly in the current difficult economic
situation.  If we are unsuccessful in competing effectively, we will
lose market share and may suffer a reduction in our margins and suffer adverse
consequences to our business, results of operations and financial
condition.




Federal
and State regulations could restrict our business and increase our costs and
non-compliance would result in penalties, litigation and damage to our
reputation.





We
operate in a highly regulated environment and are subject to extensive
regulation, supervision, and examination by the Federal Deposit Insurance
Corporation (“FDIC”), the Board of Governors of the Federal Reserve System (the
“Federal Reserve”) and the State of New Jersey.  The significant
federal and state banking regulations that we are subject to are described in
our Annual Report on Form 10-K for the year ended December 31, 2007 under “Item
1. Business.”  See “Where You Can Find More
Information.”   Such regulation and supervision of the activities
in which an institution may engage is primarily intended for the protection of
the depositors and the federal deposit insurance funds.  These
regulations affect our lending practices, capital structure, investment
practices, dividend policy and overall operations.  These statutes,
regulations, regulatory policies and interpretations of policies and regulations
are constantly evolving and may change significantly over time.  Any
such changes could subject the Corporation to additional costs, limit the types
of financial services and products we may offer and/or increase the ability of
non-banks to offer competing financial services and products, among other
things.  Due to our nation’s current economic recession and the lack
of confidence in the financial markets, it is highly probable new federal and/or
state laws and regulations of lending and funding practices and liquidity
standards will be forthcoming.  Bank regulatory agencies are expected
to be very aggressive in responding to concerns and trends identified in bank
examinations with respect to bank capital requirements.  Any increased
government oversight may increase our costs and limit our business
opportunities.  We may be required to pay even higher FDIC premiums
than the recently increased level.  Our failure to comply with laws,
regulations or policies applicable to our business could result in sanctions
against us by regulatory agencies, civil money penalties and/or reputation
damage, which could have a material adverse effect on our business, financial
condition and results of operations.  While we have policies and
procedures designed to prevent any such violations, there can be no assurances
that such violations will not occur.




A
breach of information security or compliance breach by one of our vendors could
negatively affect our reputation and business.





We rely
upon a variety of competing platforms and networks over the internet for the
purpose of data processing, communication and information
exchange.  Despite the safeguards instituted by management, such
systems are susceptible to a breach of security.  In addition, we rely
on the service of a variety of third-party vendors to meet our processing
needs.  If confidential  information is compromised,
financial losses, costs and damages could occur.  Such costs and or
losses could materially affect our earnings.  In addition, the
negative affect on our reputation could affect our ability to deliver products
and services successfully to new and existing customers.




The
trading volume of our stock remains low which could impact stock
prices.





The
trading history of our Common Stock has been characterized by relatively low
trading volume.  The value of a shareholder’s investment may be
subject to decreases due to the volatility of the price of our Common Stock,
which trades on the NASDAQ Capital Market.




The
market price of our Common Stock may be volatile and subject to fluctuations in
response to numerous factors, including, but not limited to, the factors
discussed in the other risk factors and the following:




4


·
            actual
      or anticipated fluctuation in operating
results;




·
            changes
      in interest rates;




·
            changes
      in legal or regulatory environment;




·
            press
      releases, publicity, or
announcements;




·
            changes
      in expectation of our future financial
  performance;




·
            future
      sales of our Common Stock;




·
            changes
      in economic conditions; and




·
            other
      developments affecting us or our
competitors.




These
factors may adversely affect the trading price of our Common Stock, regardless
of our  actual operating performance, and could prevent a shareholder
from selling our Common Stock at or above the current market price.




Because
of our participation in the Treasury’s Capital Purchase Program, the Corporation
is subject to certain restrictions including limitations on the payment of
dividends on and the repurchase of our Common Stock.





The Corporation has traditionally paid
a quarterly cash dividend to shareholders.  In the future, we may not
be able to declare or pay cash dividends other than regular quarterly cash
dividends of not more than $0.095 per share, which was the amount of the last
regular quarterly dividend declared and paid by the Corporation, or even to
declare or pay cash dividends at all in accordance with past practice, due to
restrictions on the payment of dividends contained in the Securities Purchase
Agreement between the Corporation and the Treasury.  These
restrictions on declaring or paying dividends could negatively effect the value
of our Common Stock.  Until the earlier of the third anniversary of
the Treasury’s investment in our Series A Preferred Stock or when all of the
shares of Series A Preferred Stock have been redeemed by us or transferred by
the Treasury to third parties, we may not, without the consent of the Treasury,
increase the cash dividend on our Common Stock or, purchase, redeem or otherwise
acquire for consideration shares of our Common Stock or any preferred stock
(other than the Series A Preferred Stock), subject to limited exceptions, most
significantly purchases in connection with benefit plans.  We are
prohibited from declaring dividend payments on common, junior preferred or pari passu preferred shares
unless we are current in our dividend payments on the Series A Preferred
Stock.  Further, common, junior preferred or pari passu preferred shares
may not be repurchased by us unless we are current in our dividend payments on
the Series A Preferred Stock.





Moreover, our ability to pay dividends
is always subject to legal and regulatory restrictions.  Any payment
of dividends in the future will depend, in large part, on the Corporation’s
earnings, capital requirements, financial condition and other factors considered
relevant by the Corporation’s Board of Directors.  Although we have
historically paid cash dividends on our Common Stock, we are not required to do
so and our Board of Directors could reduce or eliminate our Common Stock
dividend in the future.





If
we are unable to redeem the Series A Preferred Stock issued to the Treasury in
connection with our participation in the Treasury’s TARP Capital Purchase
Program within five years, the cost of the capital received will increase
significantly.





The
Series A Preferred Stock pays cumulative dividends at the rate of 5% per annum
for the first five years and 9% per annum thereafter.  The Series A
Preferred Stock has no maturity date.  If we are unable to redeem the
Series A Preferred Stock prior to February 15, 2014, the dividend payable
thereon will increase on that date from 5% per annum (approximately $500,000
annually) to 9% per annum (approximately $900,000 annually).  See
“Description of
Capital Stock - Series A Preferred Stock - Redemption and
Repurchase.”  If we are unable to redeem our Series A Preferred
Stock by February 15, 2014, this increase in the annual dividend rate on the
Series A Preferred Stock could have a material negative effect on our
liquidity.





The
Series A Preferred Stock issued to the Treasury in connection with our
participation in the Treasury’s Capital Purchase Program reduces our net income
and earnings per share of Common Stock and the Warrant issued to the Treasury
may be dilutive to the ownership interests of holders of the Common
Stock.


5





The shares of Series A Preferred Stock
pay cumulative dividends at the rate of 5% per annum for the first five years
and 9% per annum thereafter.  These dividends will reduce our net
income and earnings per common share.  The Series A Preferred Stock
ranks senior to the Common Stock and, as such, will receive preferential
treatment in the event of liquidation, dissolution or winding up of the
Corporation.  In the event that the Warrant issued to the Treasury is
exercised in whole or part, the ownership interest of our existing shareholders
will be diluted accordingly.  The shares of Common Stock underlying
the warrant represent approximately 2.2% of the shares of the Corporation’s
Common Stock outstanding as of February 26, 2009 (included in total shares
outstanding are the shares issuable upon exercise of the Warrant). The Treasury
has agreed not to vote any of the shares of Common Stock it receives upon
exercise of the Warrant, but any third party to which the Treasury transfers the
Warrant or any portion of the Warrant or any shares of Common Stock underlying
the Warrant is not similarly bound by this voting restriction.





USE
OF PROCEEDS




All securities sold pursuant to this
prospectus will be sold by the selling securityholders.  The
Corporation will not receive any proceeds from any such sales.




DESCRIPTION
OF WARRANT




On
January 30, 2009, we issued to the Treasury a ten-year Warrant to purchase up to
127,119 shares of the Corporation’s Common Stock.  The Warrant is
immediately exercisable by the holder, subject to certain limitations on
exercise described below.  The Warrant was issued concurrent with our
sale to the Treasury of 10,000 shares of Series A Preferred Stock pursuant to
the TARP Capital Purchase Program.  The following is a summary of the
material terms and provisions of the Warrant.  The actual terms of the
Warrant are set forth in the Warrant, a copy of which was attached as Exhibit
4.3 to our Current Report on Form 8-K filed on February 4, 2009 and incorporated
by reference into this prospectus. See “Where You Can Find More
Information.”




General




The
Warrant gives the holder of the Warrant (the “Warrantholder”) the right to
initially purchase up to 127,119 shares of Common Stock at an exercise price of
$11.80 per share.  Except as indicated below under the subheading
“Transferability,” the Warrant is immediately exercisable and is exercisable, in
whole or in part, any time until it expires on January 30, 2019.  The
Warrant is exercisable by the Warrantholder by surrendering the Warrant, along
with a duly completed and signed notice of exercise and the Warrantholder’s
payment for the shares of Common Stock being purchased under the Warrant to the
Corporation’s principal executive offices.  The exercise price may be
paid (i) by having us withhold from the shares of Common Stock that would
otherwise be issuable to the Warrantholder upon exercise, a number of shares of
Common Stock having a market value equal to the aggregate exercise price or (ii)
if both we and the Warrantholder consent, in cash.




Possible
Reduction in Number of Shares




If we (or
any successor to us by a business combination) complete one or more Qualified
Equity Offerings (as defined in the Warrant) on or prior to December 31, 2009
resulting in aggregate gross proceeds of at least $10,000,000 (plus the
aggregate liquidation preference amount of any shares of preferred stock issued
to the Treasury pursuant to the TARP Capital Purchase Program by a successor to
us), the number of shares of Common Stock underlying the Warrant then held by
the Treasury will be reduced by 50%.  The number of shares subject to
the Warrant are subject to further adjustment as described below under “Other
Adjustments.”




The
Warrant defines a “Qualified Equity Offering” as the sale for cash by the
Corporation (or its successor) of preferred stock or common stock that qualifies
as Tier 1 capital under applicable regulatory capital guidelines.




Transferability




The Warrant is not subject to any
restrictions on transfer; however, the Treasury may only transfer or exercise
the Warrant with respect to one-half of the shares of Common Stock underlying
the Warrant prior to the earlier of (i) the date on which we (or any successor
to us by a business combination) have received aggregate




6


gross
proceeds of at least $10,000,000 (plus the aggregate liquidation preference
amount of any shares of preferred stock issued to the Treasury pursuant to the
TARP Capital Purchase Program by a successor to us) from one or more Qualified
Equity Offerings (including those by any successor to us by a business
combination) and (ii) December 31, 2009.




Voting
of Warrant Shares




The
Treasury has agreed that it will not vote any of the shares of Common Stock that
it acquires upon exercise of the Warrant. This does not apply to any other
person who acquires any portion of the Warrant or the shares of Common Stock
underlying the Warrant from the Treasury.




Other
Adjustments




The
exercise price of the Warrant and the number of shares of Common Stock
underlying the Warrant will automatically adjust upon the following
events:




·
            any
      stock split, stock dividend, subdivision, reclassification or combination
      of our Common Stock;




·
            until
      the earlier of (i) the date on which the Treasury  no longer
      holds any portion of the Warrant and (ii) January 30, 2012, issuance of
      our Common Stock (or securities convertible into our Common Stock) for
      consideration (or having a conversion price per share) less than 90% of
      then current market value, except for issuances in connection with benefit
      plans, business acquisitions and public or other broadly marketed
      offerings; or




·
            a
      pro rata repurchase by us of our Common
Stock.




In
addition, if we declare any dividends or distributions on our Common Stock other
than our historical, ordinary cash dividends, dividends paid in our Common Stock
and other dividends or distributions covered by the first bullet point above,
the exercise price of the Warrant will be adjusted to reflect such
distribution.




In the
event of any merger, consolidation, or other business combination to which we
are a party, the Warrantholder's right to receive shares of our Common Stock
upon exercise of the Warrant will be converted into the right to exercise the
Warrant to acquire the number of shares of stock or other securities or properly
(including cash) which the Common Stock issuable upon exercise of the Warrant
immediately prior to such business combination would have been entitled to
receive upon consummation of the business combination. For purposes of the
provision described in the preceding sentence, if the holders of our Common
Stock have the right to elect the amount or type of consideration to be received
by them in the business combination, then the consideration that the
Warrantholder will be entitled to receive upon exercise will be the amount and
type of consideration received by a majority of the holders of the Common Stock
who affirmatively make an election.




No
Rights as Shareholders




The Warrant does not entitle its holder
to any of the rights of a shareholder of the Corporation prior to
exercise.




7


DESCRIPTION
OF CAPITAL STOCK




Our
authorized Capital Stock consists of:




·
            10,000,000
      shares of Common Stock, without par value per share;
  and




·
            2,500,000
      shares of preferred stock, without par value per
  share.




As of
February 26, 2009, there were 5,584,714 shares of our Common Stock issued and
outstanding and 10,000 shares of our preferred stock issued and outstanding, all
of which consisted of the Series A Preferred Stock.




In this
section we provide a description of the features and rights related to our
Capital Stock.




Series
A Preferred Stock




The
following is a brief description of the material terms and provisions of the
Series A Preferred Stock.  This summary does not purport to be
complete in all respects.  The actual terms of the Series A Preferred
Stock are set forth in our Certificate of Incorporation, as amended by the
Certificate of Amendment with respect to the Series A Preferred Stock, a copy of
which was attached as Exhibit 3(i).3 to our Current Report on Form 8-K filed
with the SEC on February 4, 2009 and incorporated by reference into this
prospectus. See “Where You Can Find More Information” regarding the
incorporation by reference of our Certificate of Incorporation.




General




Under our
Certificate of Incorporation, as amended, we have authority to issue up to
2,500,000 shares of preferred stock, no par value.  In connection with
the transactions contemplated by the Securities Purchase Agreement between us
and the Treasury, we authorized the issuance of 10,000 shares of Series A
Preferred Stock, pursuant to an amendment to our Certificate of
Incorporation.  All 10,000 shares of Series A Preferred Stock were
issued on January 30, 2009 to the Treasury pursuant to the TARP Capital Purchase
Program for a purchase price of $10,000,000 in a transaction exempt from the
registration requirements of the Securities Act.  The issued and
outstanding shares of Series A Preferred Stock are validly issued, fully paid
and nonassessable.  No other shares of preferred stock are issued and
outstanding as of the date hereof.




The
Series A Preferred Stock has a liquidation preference amount of $1,000 per
share. The Series A Preferred Stock has no maturity date.




Dividend Rights




Dividends
on the Series A Preferred Stock are payable quarterly in arrears on the
fifteenth day of February, May, August and November of each year (or, if not a
business day, the next succeeding business day), when, as and if authorized and
declared by our Board of Directors out of legally available funds at a rate of
(i) 5% per annum, from the original issuance date to but excluding the first day
of the first dividend period commencing after the fifth anniversary of the
original issuance date (i.e., 5% per annum from January 30, 2009 to but
excluding February 15, 2014), and (ii) 9% per annum, from and after the first
day of the first dividend period commencing after the fifth anniversary of the
original issuance date (i.e., 9% per annum on and after February 15,
2014).




Dividends
on the Series A Preferred Stock are cumulative. If for any reason our Board of
Directors does not declare a dividend on the Series A Preferred Stock for a
particular dividend period, or if our Board of Directors declares less than a
full dividend, we will remain obligated to pay the unpaid portion of the
dividend for that period and the unpaid dividend will compound on each
subsequent dividend date (meaning that dividends for future dividend periods
will accrue on any unpaid dividend amounts for prior dividend
periods).




We are
not obligated to pay holders of the Series A Preferred Stock any dividend in
excess of the dividends on the Series A Preferred Stock that are payable as
described above. There is no sinking fund with respect to dividends on the
Series A Preferred Stock.




8


As long
as the Series A Preferred Stock remains outstanding, we may not declare or pay a
dividend or other distribution on our Common Stock or any other shares of Junior
Stock (other than dividends payable solely in Common Stock) or Parity Stock
(other than dividends paid on a pro rata basis with the Series A Preferred
Stock), and we generally may not directly or indirectly purchase, redeem or
otherwise acquire any shares of Common Stock, Junior Stock or Parity Stock
unless all accrued and unpaid dividends on the Series A Preferred Stock for all
past dividend periods are paid in full.




The
Securities Purchase Agreement defines “Junior Stock” as our Common Stock and any
other class or series of our stock the terms of which expressly provide that it
ranks junior to the Series A Preferred Stock as to dividend rights and/or as to
rights on liquidation, dissolution or winding up of the
Corporation.  We currently have no outstanding class or series of
stock constituting Junior Stock other than our Common Stock.




The
Securities Purchase Agreement defines “Parity Stock” as any class or series of
our stock, other than the Series A Preferred Stock, the terms of which do not
expressly provide that such class or series will rank senior or junior to the
Series A Preferred Stock as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the Corporation, in each case without
regard to whether dividends accrue cumulatively or non-cumulatively. We
currently have no outstanding class or series of stock constituting Parity
Stock.




Liquidation Rights




The Series A Preferred Stock has a
liquidation preference of $1,000 per share.  In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, holders of the Series A Preferred Stock are entitled,
subject to creditors’ rights but before any distribution to holders of Common
Stock or any holders of Junior Stock, to receive for each share of Series A
Preferred Stock a liquidation preference per share, plus accrued and unpaid
dividends (including dividends accrued on any unpaid dividends) for the current
dividend period.  To the extent that the assets or proceeds available
for distribution to shareholders are not sufficient to fully pay the liquidation
payments owing to the holders of the Series A Preferred Stock and the holders of
any Parity Stock, the holders of the Series A Preferred Stock and such other
stock will share ratably in the distribution.  After the full amount
of the liquidation preference is paid, the holders of the Series A Preferred
Stock will not be entitled to any further participation in the distribution of
assets.




For
purposes of the liquidation rights of the Series A Preferred Stock, neither a
merger or consolidation of the Corporation with another entity nor a sale, lease
or exchange of all or substantially all of the Corporation’s assets will
constitute a liquidation, dissolution or winding up of the affairs of the
Corporation.




Redemption and Repurchase




The
Series A Preferred Stock may not be redeemed prior to February 15, 2012 unless
we receive aggregate net proceeds from one or more Qualified Equity Offerings as
described below of at least $2,500,000 which amount equals 25% of the aggregate
liquidation amount of the Series A Preferred Stock on the date it was
issued.  In such event, we may redeem the Series A Preferred Stock,
subject to the prior approval of the Federal Reserve, in whole or in part up to
a maximum amount equal to the aggregate net cash proceeds received by us from
such Qualified Equity Offerings at a redemption price equal to 100% of the
liquidation preference amount of $1,000 per share plus any accrued and unpaid
dividends to but excluding the date of redemption (including dividends accrued
on any unpaid dividends), provided that any declared but unpaid dividend payable
on a redemption date that occurs subsequent to the record date for the dividend
will be payable to the holder of record of the redeemed shares on the dividend
record date.




After
February 15, 2012, the Series A Preferred Stock may be redeemed, subject to the
approval of the Federal Reserve, at any time and from time to time, in whole or
in part, subject to notice as described below.




The
Series A Preferred Stock is not subject to any mandatory redemption, sinking
fund or similar provisions.  Holders of shares of Series A Preferred
Stock have no right to require redemption or repurchase of the Series A
Preferred Stock.




9


We will
mail notice of any redemption of Series A Preferred Stock by first class mail,
postage prepaid, addressed to the holders of record of the shares of Series A
Preferred Stock to be redeemed at their respective last addresses appearing on
our books.  This mailing must be at least 30 days and not more than 60
days before the date fixed for redemption.  Any notice mailed or
otherwise given as described in this paragraph will be conclusively presumed to
have been duly given, whether or not the holder receives the notice and failure
duly to give the notice by mail or otherwise, or any defect in the notice or in
the mailing or provision of the notice to any holder of Series A Preferred Stock
designated for redemption will not affect the redemption of any other Series A
Preferred Stock.  Each notice of redemption will set forth the
applicable redemption date, the redemption price, the place where shares of
Series A Preferred Stock are to be redeemed, and the number of shares of Series
A Preferred Stock to be redeemed (and, if less than all shares of Series A
Preferred Stock held by the applicable holder, the number of shares to be
redeemed from the holder).




Shares of
Series A Preferred Stock that we redeem, repurchase or otherwise acquire will
revert to authorized but unissued shares of preferred stock, which may then be
reissued by us as any series of preferred stock other than the Series A
Preferred Stock.




Conversion




Holders
of the Series A Preferred Stock have no right to exchange or convert their
shares into Common Stock or any other securities.




Preemptive Rights




The Series A Preferred Shares have no
rights of preemption whatsoever as to any of our securities, or any warrants,
rights or options issued or granted with respect to our securities.




Voting Rights




The
holders of the Series A Preferred Stock do not have voting rights other than
class voting rights granted under applicable New Jersey law and class voting
rights on (i) any authorization of shares ranking senior to the Series A
Preferred Stock; (ii) any amendment of the rights of the Series A Preferred
Stock; or (iii) any merger, exchange or similar transaction which would
adversely affect the rights of the Series A Preferred Stock.




Whenever
dividends have not been paid on the Series A Preferred Stock for six or more
quarterly dividend periods, whether or not consecutive, the authorized number of
directors of the Corporation will automatically increase by two and the holders
of the Series A Preferred Stock will have the right (together with the holders
of shares of any other classes or series of voting Parity Stock outstanding at
the time, of which the Corporation currently has none outstanding, voting
together as a class), to elect two directors (the “Preferred Directors”) to fill
such newly created directorships at our next annual meeting of shareholders (or
at a special meeting called for that purpose prior to the next annual meeting)
and at each subsequent annual meeting of shareholders until all accrued and
unpaid dividends for all past dividend periods on all outstanding shares of
Series A Preferred Stock have been paid in full at which time this right will
terminate with respect to the Series A Preferred Stock, subject to revesting in
the event of each and every subsequent default by us in the payment of dividends
on the Series A Preferred Stock.




Upon any
termination of the right of the holders of the Series A Preferred Stock to vote
for directors as described above, the Preferred Directors will cease to be
qualified as directors, the terms of office of all Preferred Directors then in
office will terminate immediately and the authorized number of directors will be
reduced by the number of Preferred Directors which had been elected by the
holders of the Series A Preferred Stock and the voting Parity
Stock.




In
addition to any other vote or consent required under New Jersey law, the vote or
consent of the holders of at least 66 2/3% of the outstanding shares of Series A
Preferred Stock, voting as a separate class, is required in order to do the
following:




·
            amend
      our Certificate of Incorporation for the Series A Preferred Stock to
      authorize or create or increase the authorized amount of, or any issuance
      of, any shares of, or any
securities




10


convertible
      into or exchangeable or exercisable for shares of, any class or series of
      stock ranking senior to the Series A Preferred Stock with respect to the
      payment of dividends and/or the distribution of assets on any liquidation,
      dissolution or winding up of the Corporation;
or




·
            amend
      or repeal any provision of the Certificate of Amendment to our Certificate
      of Incorporation containing the terms of the Series A Preferred Stock in a
      way that materially and adversely affect the rights, preferences,
      privileges or voting powers of the Series A Preferred Stock;
      or




·
            consummate
      a binding share exchange or reclassification involving the Series A
      Preferred Stock or a merger or consolidation of the Corporation with
      another entity, unless (i) the shares of Series A Preferred Stock remain
      outstanding or, in the case of a merger or consolidation in which the
      Corporation is not the surviving or resulting entity, are converted into
      or exchanged for preference securities of the surviving or resulting
      entity or its ultimate parent, and (ii) the shares of Series A Preferred
      Stock remaining outstanding or such preference securities, have such
      rights, preferences, privileges, voting powers, limitations and
      restrictions, taken as a whole, are not materially less favorable than the
      rights, preferences, privileges, voting powers, limitations and
      restrictions of the Series A Preferred Stock prior to consummation of the
      transaction, taken as a whole;




provided, however, that (1)
any increase in the amount of our authorized but unissued shares of preferred
stock, and (2) the creation and issuance, or an increase in the authorized or
issued amount, of any other series of preferred stock, or any securities
convertible into or exchangeable or exercisable for any other series of
preferred stock, ranking equally with and/or junior to the Series A Preferred
Stock with respect to the payment of dividends, whether such dividends are
cumulative or non-cumulative and the distribution of assets upon our
liquidation, dissolution or winding up, will not be deemed to materially and
adversely affect the rights, preferences, privileges or voting powers of the
Series A Preferred Stock and will not require the vote or consent of the holders
of the Series A Preferred Stock.




To the
extent holders of the Series A Preferred Stock are entitled to vote, holders of
shares of the Series A Preferred Stock will be entitled to one vote for each
share then held.




Common
Stock




The
following is a brief description of our Common Stock that may be resold by the
selling securityholders.  This summary does not purport to be complete
in all respects and is subject to and qualified in its entirety by reference to
our Certificate of Incorporation, as amended, and our Bylaws, copies of which
have been filed with the SEC and are also available upon request from us, and by
applicable New Jersey law.




General




Under our
Certificate of Incorporation, as amended, we have authority to issue up to
10,000,000 shares of Common Stock, no par value.  As of February 26,
2009, there were 5,584,714 shares of our Common Stock
outstanding.  All outstanding shares of our Common Stock are fully
paid and non-assessable.  There are no redemption or sinking fund
provisions that apply to our Common Stock.




Our
Common Stock is listed on the NASDAQ Capital Market system under the symbol
“SSFN.”




Dividend and Liquidation
Rights




Subject
to preferences to which holders of any series of preferred shares may be
entitled, holders of Common Stock of the Corporation are entitled to dividends
if, as and when determined by our board of directors in its sole discretion out
of funds lawfully available for the payment of dividends.  Holders of
Common Stock of the Corporation are also entitled, upon our liquidation,
dissolution or winding up, and after claims of creditors and the preferences of
any class or series of preferred stock outstanding at the time of liquidation,
dissolution or winding up, to receive pro rata our net assets, if
any.  We pay dividends on our Common Stock only if we have paid or
provided for all dividends on any outstanding series of preferred stock for the
then current period and, if




11


the
preferred stock is cumulative preferred stock, all prior periods.  Our
Series A Preferred Stock has, and any other series of preferred stock when
issued will have, preference over our Common Stock with respect to the payment
of dividends and the distribution of assets in the event of our liquidation,
dissolution or winding up.




Voting Rights




Holders
of our Common Stock are entitled to one vote for each share that they hold on
all matters submitted to a vote of our common shareholders, except as otherwise
required by law.  The holders of our Common Stock vote together with
the holders of preferred stock as a single class on all
matters.  Except as otherwise provided in law or by our Certificate of
Incorporation, a quorum for a meeting of shareholders is a majority of the
outstanding shares.  The holders of our Common Stock have no
cumulative voting rights.




Transfer Agent




The
transfer agent and registrar for our Common Stock is Registrar and Transfer
Company.




Anti-Takeover
Provisions




Provisions of our certificate of
incorporation may have anti-takeover effects.  These provisions may
discourage, delay, defer or prevent a tender offer or takeover that a
shareholder might consider to be in such shareholder’s best
interest.  The effect of these provisions is discussed briefly
below.




Authorized Stock




Our Certificate of Incorporation
authorizes the issuance of 10,000,000 shares of Common Stock and 2,500,000
shares of preferred stock.  These shares of common stock and preferred
stock provide our Board of Directors with as much flexibility as possible to
effect, among other things, transactions, financings, acquisitions, stock
dividends, stock splits and the exercise of employee stock
options.  However, these additional authorized shares may also be used
by the Board of Directors, consistent with its fiduciary duties, to deter future
attempts to gain control of us.  See “Anti-Takeover Provisions - Blank
Check Preferred Stock” below.




Blank Check Preferred
Stock




Of the 2,500,000 shares of preferred
stock that the Corporation is authorized to issue under our Certificate of
Incorporation, 10,000 shares have been designated as Series A Preferred Stock
and have been issued to the Treasury in connection with our participation in the
TARP Capital Purchase Program.  The remaining 2,490,000 undesignated
shares of preferred stock are typically referred to as “blank check” preferred
stock.  This refers to stock for which the rights and restrictions may
be determined by the board of directors of a corporation without the need for
further action of the shareholders of the corporation.  Our
Certificate of Incorporation authorizes the Corporation’s Board of Directors to
so designate and issue a new series of preferred stock without further
shareholder action.  The Board of Directors has sole authority to
determine the terms of any one or more series of preferred stock, including
voting rights, conversion rates and liquidation preferences.  As a
result of the ability to fix voting rights for a series of preferred stock, the
Board of Directors has the power, to the extent consistent with its fiduciary
duties, to issue a series of preferred stock to persons friendly to management
in order to attempt to block a tender offer, merger or other transaction by
which a third party seeks control of us and thereby assist members of management
to retain their positions.




Classification of the Board of
Directors




Our Certificate of Incorporation
currently provides that our Board of Directors is divided into three classes, as
nearly identical in number as the then total number of directors constituting
the entire Board of Directors permits, with one class elected annually to serve
for a term of three years. This classification of our Board of Directors may
have the effect of making it more difficult for shareholders to change the
composition of our Board of Directors whether or not a change in the composition
of the Board of Directors may be viewed as beneficial to the
Corporation.  It may also discourage a takeover of the Corporation
because a shareholder with a majority interest in the Corporation may have to
wait for at least two consecutive annual meetings of shareholders to elect a
majority of the members of our Board of Directors.  In addition, our
Certificate of




12


Incorporation
provides that none of the members of the Board of Directors may be removed by
the shareholders of the Corporation without cause and “cause” is defined to mean
(i) conviction of a felony, (ii) declaration by order of a court that the
director is of unsound mind, or (iii) gross abuse of trust which is proven by
clear and convincing evidence to have been committed in bad faith.




Shareholder Vote on Certain
Transactions




Our Certificate of Incorporation
provides that no merger, consolidation, nor any action which would result in the
disposition of all or substantially all of the assets of the Corporation shall
be valid unless first approved by the affirmative vote of the holders of record
of 80% of the outstanding shares of capital stock of the Corporation entitled to
vote thereon, provided, however that if any such action has been approved prior
to the vote of the shareholders by a majority of the Corporation’s Board of
Directors, the affirmative vote of the holders of a majority of the outstanding
shares of capital stock then entitled to vote on such matters shall be
required.  This provision in our Certificate of Incorporation may not
be amended except by the affirmative vote of the holders of record of 80% of the
outstanding shares of capital stock of the Corporation entitled to
vote.  This provision may also have the effect of making it more
difficult for shareholders to effect a takeover of our Corporation.




SELLING
SECURITYHOLDERS




The selling securityholders may include
(i) the Treasury, the initial selling securityholder under this prospectus,
which acquired the Warrant and purchased all of the shares of Series A Preferred
Stock from us on January 30, 2009 in a private placement exempt from the
registration requirements of the Securities Act, and (ii) the Treasury’s
successor, or any other person or persons holding any portion of the Warrant and
any shares of our Common Stock issued upon exercise of the Warrant to whom the
Treasury has transferred its registration rights under the terms of the
Securities Purchase Agreement between us and the Treasury.  The
Treasury is required to notify us in writing of any such transfer of its
registration rights within ten (10) days after the transfer, including the name
and address of the transferee and the number and type of securities with respect
to which the registration rights have been assigned.  As of the date
of this prospectus, the Treasury has not notified us of any such
transfer.  Accordingly, we believe that the Treasury holds record and
beneficial ownership of the entire amount of the Warrant (none of which has been
exercised) covered by this prospectus.




The securities to be offered under this
prospectus for the account of the selling securityholders are:




·
            a
      Warrant, immediately exercisable and expiring on January 30, 2019, to
      purchase 127,119 shares of the Corporation’s Common Stock at an exercise
      price of $11.80 per share (subject to adjustment as described under
      “Description of Warrant”); and




·
            the
      127,119 shares of our Common Stock issuable upon exercise of the Warrant
      (subject to adjustment as described under “Description of Warrant”), which
      shares, if issued, would represent ownership of approximately 2.2% of our
      Common Stock outstanding as of February 26, 2009 (included in total shares
      outstanding are the shares issuable upon exercise of the
      Warrant).




For purposes of this prospectus, we
have assumed that, after completion of the offering, none of the securities
covered by this prospectus will be held by the selling
securityholders.




We do not know when or in what amounts
the selling securityholders may offer the securities for sale.  The
selling securityholders might not sell any or all of the securities offered by
this prospectus.  Because the selling securityholders may offer all or
some of the securities pursuant to this offering, and because, to
our  knowledge, no sale of any of the securities is currently subject
to any agreements, arrangements or understandings, we cannot estimate the number
of the securities that will be held by the selling securityholders after
completion of the offering.




The only potential selling
securityholder whose identity we are currently aware of is the
Treasury.  Other than with respect to the Treasury’s acquisition of
the Series A Preferred Stock and the Warrant from us, the Treasury has not had a
material relationship with us.




13







Information about the selling
securityholders may change over time and changed information will be set forth
in supplements to this prospectus if and when necessary.




PLAN
OF DISTRIBUTION




The selling securityholders, and their
successors and transferees, may sell all or a portion of the securities
beneficially owned by them and offered by this prospectus from time to time
directly or through one or more underwriters, broker-dealers or
agents.  If the securities are sold through underwriters,
broker-dealers or agents, the selling securityholders will be responsible for
compensating the underwriters, broker-dealers or agents in the form of
underwriting discounts or commissions or agent’s commissions.  The
securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined
at the time of sale, or at negotiated prices.  These sales may be
effected in transactions, which may involve crosses or block
transactions.  The selling securityholders may use any one or more of
the following methods when selling shares:




·
            on
      any national securities exchange or quotation service on which the
      securities may be listed or quoted at the time of
  sale;




·
            in
      the over-the-counter market;




·
            in
      transactions otherwise than on these exchanges or systems or in the
      over-the-counter market;




·
            through
      the writing of options, whether such options are listed on an options
      exchange or otherwise;




·
            ordinary
      brokerage transactions and transactions in which the broker-dealer
      solicits purchasers;




·
            block
      trades in which the broker-dealer will attempt to sell the shares as agent
      but may position and resell a portion of the block as principal to
      facilitate the transaction;




·
            purchases
      by a broker-dealer as principal and resale by the broker-dealer for its
      account;




·
            an
      exchange distribution in accordance with the rules of the applicable
      exchange;




·
            privately
      negotiated transactions;




·
            settlement
      of short sales entered into after the effective date of the registration
      statement of which this prospectus is a
part;




·
            broker-dealers
      may agree with the selling securityholders to sell a specified number of
      such shares at a stipulated price per
share;




·
            a
      combination of any such methods of sale;
and




·
            any
      other method permitted pursuant to applicable
  law.




The
selling securityholders may also sell securities under Rule 144 under the
Securities Act, if available, rather than under this prospectus.




Broker-dealers
engaged by the selling securityholders may arrange for other brokers-dealers to
participate in sales. If the selling securityholders effect such transactions by
selling securities to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling securityholders or
commissions from purchasers of the securities for whom they may act as agent or
to whom they may sell as principal. These




14


discounts,
concessions or commissions as to any particular underwriter, broker-dealer or
agent will be in amounts to be negotiated, which are not expected to be in
excess of those customary in the types of transactions involved.




In
connection with sales of securities, the selling securityholders may enter into
hedging transactions with broker-dealers or other financial institutions, which
may in turn engage in short sales of the securities in the course of hedging in
positions they assume. The selling securityholders may also sell securities
short and if such short sale shall take place after the date that the
registration statement of which this prospectus is a part is declared effective
by the SEC, the selling securityholders may deliver securities covered by this
prospectus to close out short positions and to return borrowed shares in
connection with such short sales. The selling securityholders may also loan or
pledge securities to broker-dealers that in turn may sell such shares. The
selling securityholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).




The
selling securityholders may pledge or grant a security interest in some or all
of the securities owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the
securities from time to time pursuant to this prospectus or any amendment or
supplement to this prospectus under Rule 424 (b)(3) or other applicable
provision of the Securities Act, amending, if necessary, the identification of
selling securityholders to include the pledgee, transferee or other successors
in interest as selling securityholders under this prospectus. The selling
securityholders also may transfer and donate the securities in other
circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.




The
selling securityholders and any broker-dealer participating in the distribution
of the securities may be deemed to be “underwriters” within the meaning of the
Securities Act, and any commission paid, or any discounts or concessions allowed
to, any such broker-dealer may be deemed to be underwriting commissions or
discounts under the Securities Act. At the time a particular offering of
securities is made, a prospectus supplement, if required, will be distributed
which will set forth (i) the name of each such selling securityholder and of the
participating broker-dealer(s), (ii) the number of securities involved, (iii)
the price at which such securities were sold, (iv) the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable, and
(v) any other facts material to the transaction.




The
aggregate proceeds to the selling securityholders from the sale of the
securities will be the purchase price of the securities less discounts and
commissions, if any.




Under the
securities laws of some states, the securities covered by this prospectus may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in some states the securities may not be sold unless such shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.




There can
be no assurance that any selling securityholder will sell any or all of the
securities registered pursuant to the registration statement of which this
prospectus forms a part.




If a
selling securityholder uses this prospectus for any sale of securities, it will
be subject to the prospectus delivery requirements of the Securities Act. The
selling securityholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and the rules and regulations thereunder,
including, without limitation, Regulation M under the Exchange Act, which may
limit the timing of purchases and sales of any of the securities by the selling
securityholders and any other participating person. Regulation M may also
restrict the ability of any person engaged in the distribution of securities to
engage in market-making activities with respect to such securities. All of the
foregoing may affect the marketability of the securities covered by this
prospectus and the ability of any person or entity to engage in market-making
activities with respect to such securities.




Pursuant
to the Securities Purchase Agreement between us and the Treasury, we have agreed
to indemnify the selling securityholders against certain liabilities, including
certain liabilities under the Securities




15


Act.  We
have agreed to pay substantially all expenses of the registration of the
securities covered by this prospectus, including, without limitation, SEC filing
fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, that a selling securityholder will pay all underwriting
discounts and selling commissions, if any, or any transfer taxes or other
expenses associated with the sale of the securities by or on behalf of the
selling securityholders.




INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE




The SEC
allows us to “incorporate by reference” into this prospectus information
contained in other documents that we file with the SEC, which means that we can
disclose important information to you by referring you to those
documents.  The information incorporated by reference is considered to
be a part of this prospectus, and information in documents that we later file
with the SEC will automatically update and supersede this
information.  Therefore, before you determine to invest in a
particular offering of securities under this shelf registration, you should read
reports we may have filed with the SEC after the date of this
prospectus.  In all cases, you should rely on the more recent
information over different information included in this prospectus.




We
incorporate by reference into this prospectus the documents listed below, except
to the extent any information contained in such filings is deemed “furnished” in
accordance with SEC rules.  Such furnished information is not deemed
filed under the Exchange Act  and is not incorporated in this
prospectus.




·
            our
      Annual Report on Form 10-K for the year ended December 31, 2007, filed
      with the SEC on March 31, 2008;




·
            our
      Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30,
      and September 30, 2008, filed with the SEC on May 15, August 13 and
      November 13, 2008, respectively;




·
            our
      Current Reports on Form 8-K filed with the SEC on June 18, July 7, and
      August 6, 2008 and January 6, February 4, 2009 and February 24, 2009;
      and




·
            the
      description of the Corporation’s Common Stock which is contained in the
      Corporation’s Registration Statement on Form 8-B filed with the SEC on
      December 10, 1996, including any amendment or report filed for the purpose
      of updating such description.




In
addition, all documents subsequently filed by the Corporation with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (except to
the extent any information contained in such filings is “furnished” to the SEC
in accordance with SEC rules) after the date of this prospectus and prior to the
termination of this offering shall be deemed incorporated by reference into this
prospectus and to be a part hereof from the date of filing of such
documents.




The
Corporation will provide without charge to each person to whom a copy of this
prospectus is delivered, upon such person’s written or oral request, a copy of
any and all of the documents which are incorporated by reference herein (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Such requests should be directed
to Stewardship Financial Corporation, 630 Godwin Avenue, Midland Park, New
Jersey 07432-1405, Attention: Corporate Services, telephone:
201-444-7100.




LEGAL
MATTERS




The
validity of the securities offered by this prospectus is being passed upon for
the Corporation by McCarter & English, LLP, Newark, New Jersey.




EXPERTS




The
consolidated financial statements of Stewardship Financial Corporation and its
subsidiary as of December 31, 2007 and 2006 and for each of the years in the
two-year period ended December 31, 2007, included in Stewardship Financial
Corporation’s Annual Report on Form 10-K, incorporated by reference
herein,




16


have been
so incorporated in reliance upon the report of Crowe Horwath LLP (formerly known
as Crowe Chizek and Company LLC), the Corporation’s independent registered
public accounting firm for those periods specified above, and upon the authority
of Crowe Horwath LLP, as experts in accounting and auditing.




INDEMNIFICATION




Article
VII of the Corporation’s Certificate of Incorporation requires the Corporation
to indemnify its officers, directors, employees and agents and former officers,
directors, employees and agents, and any other persons serving at the request of
the Corporation as an officer, director, employee or agent of another
corporation, association, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys’ fees, judgments, fines and
amounts paid in settlement) incurred in connection with any pending or
threatened action, suit, or proceeding, whether civil, criminal, administrative
or investigative, with respect to which such officer, director, employee, agent
or other person is a party, or is threatened to be made a party, to the full
extent permitted by the New Jersey Business Corporation Act.




The
Corporation’s Certificate of Incorporation also provides that the Corporation
may purchase and maintain insurance on behalf of any person or persons
enumerated in Article VII thereof against any liability asserted against or
incurred by such person or persons arising out of their status as corporate
directors, officers, employees, or agents whether or not the Corporation would
have the power to indemnify them against such liability under the provisions of
this article.




No
dealer, sales person or other person has been authorized to give any information
or to make any representations other than those contained in this prospectus,
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Corporation. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any of the
securities offered hereby in any jurisdiction in which, or to any person to
whom, such offer or solicitation may not lawfully be made. Neither the delivery
of this prospectus nor any sales made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct as of
any time subsequent to the date hereof.




DISCLOSURE
OF COMMISSION POSITION ON


INDEMNIFICATION
OF SECURITIES ACT LIABILITIES







With
respect to possible indemnification of officers, directors, employees and agents
of the Corporation for liabilities arising under the Securities Act, the
Corporation has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.




WHERE
YOU CAN FIND MORE INFORMATION




The
Corporation is subject to the informational requirements of the Exchange Act, as
amended, and in accordance therewith files annual, quarterly and current
reports, proxy and information statements and other information with the
SEC.  Our SEC filings can be inspected and copied at the Public
References Room maintained by the SEC at 100 F Street, N.E. Washington, D.C.
20549.  You may obtain information on the operation of the SEC’s
Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC
maintains an Internet web site that contains reports, proxy and information
statements and other information about issuers that file electronically with the
SEC.  Our public filings with the SEC are available to the public free
of charge through the SEC’s Internet web site at
http://www.sec.gov.  Our public filings with the SEC are also
available on our Internet web site at www.asbnow.com, in the “Investor
Relations” section of the web site, under the subsection titled “SEC
Filings.”



















17


PART
II




INFORMATION
NOT REQUIRED IN PROSPECTUS




ITEM
      14.
            OTHER
      EXPENSES OF ISSUANCE AND
DISTRIBUTION.




The following table sets forth the
expenses we expect to incur in connection with the issuance and distribution of
the securities being registered.  All amounts shown are estimates
except for the SEC registration fee.  Actual expenses may be more or
less.  The Corporation will bear all of these expenses.





SEC
      Registration Fee
                  
                  $
                  83.70Legal
      Fees and Expenses*
                  
                  $
                  15,000.00Accounting
      Fees and Expenses*
                  
                  $
                  5,000.00Miscellaneous
                  
                  $
                  500.00TOTAL:
                  
                  $
                  20,583.70




*
Estimated solely for the purpose of this Item.  Actual expenses may be
more or less.




ITEM
      15.
            INDEMNIFICATION
      OF DIRECTORS AND OFFICERS.




Article
VII of the Corporation’s Certificate of Incorporation requires the Corporation
to indemnify its officers, directors, employees and agents and former officers,
directors, employees and agents, and any other persons serving at the request of
the Corporation as an officer, director, employee or agent of another
corporation, association, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys’ fees, judgments, fines and
amounts paid in settlement) incurred in connection with any pending or
threatened action, suit, or proceeding, whether civil, criminal, administrative
or investigative, with respect to which such officer, director, employee, agent
or other person is a party, or is threatened to be made a party, to the full
extent permitted by the New Jersey Business Corporation Act (the
“Act”).




The
Corporation’s Certificate of Incorporation also provides that the Corporation
may purchase and maintain insurance on behalf of any person or persons
enumerated in Article VII thereof against any liability asserted against or
incurred by such person or persons arising out of their status as corporate
directors, officers, employees, or agents whether or not the Corporation would
have the power to indemnify them against such liability under the provisions of
this Article.




Section
l4A:3-5 of the Act gives a corporation the power, without a specific
authorization in its certificate of incorporation or by-laws, to indemnify a
director, officer, employee or agent (a “corporate agent”) against expenses and
liabilities incurred in connection with certain proceedings involving the
corporate agent by reason of his being or having been such a corporate agent,
provided that with regard to a proceeding other than one by or in the right of
the corporation, the corporate agent must have acted in good faith and in the
manner reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal proceeding, such corporate agent
had no reasonable cause to believe his conduct was unlawful. In such proceeding,
termination of a proceeding by judgment, order, settlement, conviction or upon
plea of nolo contendere or its equivalent does not of itself create a
presumption that any such corporate agent failed to meet the above applicable
standards of conduct. The indemnification provided by the Act does not exclude
any rights to which a corporate agent may be entitled under a certificate of
incorporation, by-law, agreement, vote of shareholders or otherwise. No
indemnification, other than that required when a corporate agent is successful
on the merits or otherwise in any of the above proceedings shall be allowed if
such indemnification would be inconsistent with a provision of the certificate
of incorporation, a by-law or a resolution of the board of directors or of the
shareholders, an agreement or other proper corporate action in effect at the
time of the accrual of the alleged cause of action which prohibits, limits or
otherwise conditions the exercise of indemnification powers by the corporation
or the rights of indemnification to which a corporate agent may be
entitled.




With
respect to possible indemnification of officers, directors, and other corporate
agents for liabilities arising under the Securities Act, the Corporation has
been informed that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.




18







ITEM
      16.
            EXHIBITS.




The
following exhibits are filed with or incorporated by reference into this
Registration Statement.




Exhibit No.
                                              Description3(i).1
                                              Certificate
      of Incorporation of Stewardship Financial Corporation (1)3(i).2
                                              Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation (2)3(i).3
                                              Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation(3)3(i).4
                                              Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation(4)3(i).5
                                              Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation(5)3(i).6
                                              Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation containing the terms of the Corporation’s Fixed Rate
      Cumulative Perpetual Preferred Stock, Series A (6)3(ii)
                                              Bylaws
      of Stewardship Financial Corporation (7)4.1
                                              Letter
      Agreement, dated January 30, 2009 (including Securities Purchase Agreement
      - Standard Terms attached as Exhibit A), between the Corporation and the
      United States Department of the Treasury (8)4.2
                                              Form
      of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock,
      Series A (9)4.3
                                              Warrant
      dated January 30, 2009 to purchase up to 127,119 shares of Common Stock
      (10)5
                                              Opinion
      of McCarter & English, LLP23.1
                                              Consent
      of Crowe Horwath LLP, independent registered public accounting
      firm23.2
                                              Consent
      of McCarter & English, LLP (contained in its Opinion filed as Exhibit
      5 to this Registration Statement)24
                                              Power
      of attorney (contained in the signature page of this Registration
      Statement)





_________________(1)
                                                                  Attached
      as Exhibit 3(i) to the Corporation’s Registration Statement on Form 8-B,
      Registration No. 0-21855, filed with the SEC on December 10, 1996 and
      incorporated herein by reference.(2)
                                                                  Attached
      as Exhibit 3(ii) to the Corporation’s Registration Statement on Form 8-B,
      Registration No. 0-21855, filed with the SEC on December 10, 1996 and
      incorporated herein by reference.









19




(3)
                      Attached
      as Exhibit A to the Corporation’s Definitive Proxy Statement on Schedule
      14A, filed with the SEC on April 18, 1997 and incorporated herein by
      reference.(4)
                      Attached
      as Appendix A to the Corporation’s Definitive Proxy Statement on Schedule
      14A, filed with the SEC on April 10, 2002 and incorporated herein by
      reference.(5)
                      Attached
      as Exhibit D to the Corporation’s Definitive Proxy Statement on Schedule
      14A, filed with the SEC on April 8, 2004 and incorporated herein by
      reference.(6)
                      Attached
      as Exhibit 3.1 to the Corporation’s Current Report on Form 8-K filed with
      the SEC on February 4, 2009 and incorporated herein by
      reference.(7)
                      Attached
      as Exhibit 3(iii) to the Corporation’s Registration Statement on Form 8-B,
      Registration No. 0-21855, filed with the SEC on December 10, 1996 and
      incorporated herein by reference.(8)
                      Attached
      as Exhibit 10.1 to the Corporation’s Current Report on Form 8-K filed with
      the SEC on February 4, 2009 and incorporated herein by
      reference.(9)
                      Attached
      as Exhibit 4.1 to the Corporation’s Current Report on Form 8-K filed with
      the SEC on February 4, 2009 and incorporated herein by
      reference.(10)
                      Attached
      as Exhibit 4.2 to the Corporation’s Current Report on Form 8-K filed with
      the SEC on February 4, 2009 and incorporated herein by
      reference.
 ITEM
      17.
              UNDERTAKINGS.




(A)
            The
      undersigned registrant (the “Registrant”) hereby
    undertakes:




(1)    To file,
during the period in which offers or sales are being made, a post-effective
amendment to this Registration Statement:




(i)           To
include any prospectus required by Section 10(a)(3) of the Securities
Act;




(ii)           To
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration
Statement.  Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the “Calculation of
Registration Fee” table in the effective Registration Statement;




(iii)           To
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement;




provided,
however, that paragraphs (A)(1)(i), (A)(1)(ii) and (A)(1)(iii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.




(2)   That, for the
purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.




20


(3)   To remove from
registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.




(4)   The undersigned
Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act to any purchaser, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to an offering, other
than registration statements relying on Rule 430B or other than prospectuses
filed in reliance on Rule 430A, shall be deemed to be part of and included in
the registration statement as of the date it is first used after effectiveness;
provided, however, that
no statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale
prior to such first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such date of first
use.




(B)     The
undersigned Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant’s annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan’s annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.




(C)     Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers, and controlling persons of the undersigned
Registrant pursuant to the foregoing provisions, or otherwise, the undersigned
Registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.














21


SIGNATURE




Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies that
it has reasonable grounds to believe that it meets all the requirements of
filing on Form S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the Borough of
Midland Park, State of New Jersey, on this 2nd day of
March, 2009.




STEWARDSHIP
      FINANCIAL CORPORATIONBy:
              /s/Paul
      Van OstenbridgePaul
      Van Ostenbridge, President and Chief Executive Officer (Principal
      Executive Officer)







POWER
OF ATTORNEY




KNOW ALL
MEN BY THESE PRESENTS, each of the undersigned constitutes and appoints Paul Van
Ostenbridge and Claire M. Chadwick, and each of them, as attorneys-in-fact and
agents, with full power of substitute and resubstitution, for and in the name,
place and stead of the undersigned, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement, and all post-effective amendments thereto, and to file the same, with
all exhibits thereto and all other documents in connection therewith, with the
SEC, granting unto said attorneys-in-fact and agents full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
that each of said attorney-in-fact or substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.






Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
on Form S-3 has been signed by the following persons in the capacities and on
the dates indicated.




Name
                    
                    Title
                    Date/s/Paul
      Van Ostenbridge
                    
                    President
      and Chief Executive
                    March
      2, 2009Paul
      Van Ostenbridge
                    
                    Officer
      (Principal Executive
                      Officer)/s/Claire
      M. Chadwick
                    
                    Senior
      Vice President and Chief
                    March
      2, 2009Claire
      M. Chadwick
                    
                    Financial
      Officer (Principal
                      Financial
      Officer and Principal
                      Accounting
      Officer)/s/Harold
      Dyer
                    
                    Director
                    March
      2, 2009Harold
      Dyer/s/William
      C. Hanse
                    
                    Director
      and Chairman of the Board
                    March
      2, 2009William
      C. Hanse/s/Margo
      L. Lane
                    
                    Director
                    March
      2, 2009Margo
      L. Lane


22





/s/Arie
      Leegwater
              
              Director
              March
      2, 2009Arie
      Leegwater/s/John
      L. Steen
              
              Director
              March
      2, 2009John
      L. Steen/s/Robert
      J. Turner
              
              Director
              March
      2, 2009Robert
      J. Turner/s/William
      J. Vander Eems
              
              Director
              March
      2, 2009William
      J. Vander Eems/s/Abrahma
      Van Wingerden
              
              Director
      and Vice Chairman of the
              March
      2, 2009Abraham
      Van Wingerden
              
              Board/s/
      Michael A. Westra
              
              Director
              March
      2, 2009Michael
      A. Westra/s/Howard
      R. Yeaton
              
              Director
              March
      2, 2009Howard
      R. Yeaton







EXHIBIT
INDEX




Exhibit No.
                                                        Description3(i).1
                                                        Certificate
      of Incorporation of Stewardship Financial Corporation (1)3(i).2
                                                        Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation (2)3(i).3
                                                        Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation(3)3(i).4
                                                        Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation(4)3(i).5
                                                        Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation(5)3(i).6
                                                        Certificate
      of Amendment to Certificate of Incorporation of Stewardship Financial
      Corporation containing the terms of the Corporation’s Fixed Rate
      Cumulative Perpetual Preferred Stock, Series A (6)3(ii)
                                                        Bylaws
      of Stewardship Financial Corporation (7)                     23
  4.1
                                                        Letter
      Agreement, dated January 30, 2009 (including Securities Purchase Agreement
      - Standard Terms attached as Exhibit A), between the Corporation and the
      United States Department of the Treasury (8)4.2
                                                        Form
      of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock,
      Series A (9)4.3
                                                        Warrant
      dated January 30, 2009 to purchase up to 127,119 shares of Common Stock
      (10)5
                                                        Opinion
      of McCarter & English, LLP23.1
                                                        Consent
      of Crowe Horwath LLP, independent registered public accounting
      firm23.2
                                                        Consent
      of McCarter & English, LLP (contained in its Opinion filed as Exhibit
      5 to this Registration Statement)24
                                                        Power
      of attorney (contained in the signature page of this Registration
      Statement)





_________________(1)
                                  Attached
      as Exhibit 3(i) to the Corporation’s Registration Statement on Form 8-B,
      Registration No. 0-21855, filed with the SEC on December 10, 1996 and
      incorporated herein by reference.(2)
                                  Attached
      as Exhibit 3(ii) to the Corporation’s Registration Statement on Form 8-B,
      Registration No. 0-21855, filed with the SEC on December 10, 1996 and
      incorporated herein by reference.(3)
                                  Attached
      as Exhibit A to the Corporation’s Definitive Proxy Statement on Schedule
      14A, filed with the SEC on April 18, 1997 and incorporated herein by
      reference.(4)
                                  Attached
      as Appendix A to the Corporation’s Definitive Proxy Statement on Schedule
      14A, filed with the SEC on April 10, 2002 and incorporated herein by
      reference.(5)
                                  Attached
      as Exhibit D to the Corporation’s Definitive Proxy Statement on Schedule
      14A, filed with the SEC on April 8, 2004 and incorporated herein by
      reference.(6)
                                  Attached
      as Exhibit 3.1 to the Corporation’s Current Report on Form 8-K filed with
      the SEC on February 4, 2009 and incorporated herein by
      reference.(7)
                                  Attached
      as Exhibit 3(iii) to the Corporation’s Registration Statement on Form 8-B,
      Registration No. 0-21855, filed with the SEC on December 10, 1996 and
      incorporated herein by reference.(8)
                                  Attached
      as Exhibit 10.1 to the Corporation’s Current Report on Form 8-K filed with
      the SEC on February 4, 2009 and incorporated herein by
      reference.(9)
                                  Attached
      as Exhibit 4.1 to the Corporation’s Current Report on Form 8-K filed with
      the SEC on February 4, 2009 and incorporated herein by
      reference.(10)
                                  Attached
      as Exhibit 4.2 to the Corporation’s Current Report on Form 8-K filed with
      the SEC on February 4, 2009 and incorporated herein by
      reference.







24