Exhibit 4.2


 


STEWARDSHIP FINANCIAL CORPORATION


DIVIDEND REINVESTMENT PLAN


(as amended and restated effective as of
May 21, 2015)


 


The Corporation and the Bank


 


Stewardship Financial Corporation (the “Corporation”)
was organized in January 1995 as a business corporation under the laws of the State of New Jersey by the Board of Directors of
Atlantic Stewardship Bank (the “Bank”) in order to serve as a bank holding company for the Bank. The Bank is a wholly
owned banking subsidiary of the Corporation. The Bank is a New Jersey state chartered commercial bank formed in 1985 by local businessmen
to serve the needs of the local community. The only significant activity of the Corporation is ownership and supervision of the
Bank. The Bank’s by-laws include a commitment to tithe ten percent (10%) of its pre-tax profits to Christian and civic charities.
As a bank holding company, the Corporation is subject to regulation and supervision by the Board of Governors of the Federal Reserve
System under the Bank Holding Company Act of 1956, as amended. In addition to the Federal Reserve, the Bank is subject to regulation
by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation. The principal source of funds
for dividend payments by the Corporation is dividends paid by the Bank to the Corporation. The amount of dividends paid by the
Bank is limited by state and federal laws and regulations.


 


The offices of the Corporation and the Bank
are located at 630 Godwin Avenue, Midland Park, New Jersey 07432-1405. The Corporation’s website is www.asbnow.com.


 


Purchase Price of Common Stock


 


The Common Stock is listed on the Nasdaq Capital
Market under the symbol SSFN.


 


The purchase price for the shares of Common
Stock available under the Plan that are purchased from the Corporation through the reinvestment of cash dividends shall be 95%
of the average market price of the Common Stock in the 14-day period preceding the dividend record date, subject to adjustment
as determined by the Board of Directors. The purchase price for shares of Common Stock purchased on the open market shall be 95%
of the weighted average reported price of such shares, subject to adjustment as determined by the Board of Directors.


 


The purchase price for the shares of Common
Stock available under the Plan that are purchased from the Corporation through optional cash investments shall be 100% of the average
market price of the Common Stock in the 14-trading day period preceding the relevant investment date. The purchase price for shares
of Common Stock purchased on the open market with optional cash payments shall be 100% of the weighted average reported price of
such shares. The price to the participant will be the weighted average purchase price(s) of the Common Stock that is purchased.


 


In addition, even though the purchase price
for the reinvestment of cash dividends provides for a discount from the market price, NO ASSURANCE CAN BE GIVEN THAT SHAREHOLDERS
WILL BE ABLE TO SELL THE COMMON STOCK PURCHASED UNDER THE PLAN AT A PROFIT DUE TO, AMONG OTHER THINGS, CHANGING CONDITIONS.


 


THE DIVIDEND REINVESTMENT PLAN


 


This Prospectus describes how you can reinvest
the cash dividends that you receive with respect to the shares of the Corporation’s Common Stock that you own or you can
purchase shares of the Corporation’s Common Stock pursuant to our Dividend Reinvestment Plan, which we refer to herein as
the “Plan”. We adopted our original Dividend Reinvestment Plan in 1994 to offer our shareholders an opportunity to
purchase additional shares of Common Stock automatically through the reinvestment of cash dividends. From time to time, we have
authorized increases in the number of shares available under the Plan and made other amendments to the Plan. The current Plan provides
shareholders with a simple, convenient method of reinvesting their cash dividends and making optional cash investments to purchase
additional shares of Common Stock without payment of any brokerage commission or other administrative commissions or fees. The
Plan will be administered by the Corporation’s stock transfer agent, Computershare. This Prospectus describes the Plan in
effect as of May 21, 2015.


 




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The following information about the Plan is
provided in Question and Answer format for your convenient reference.


 


Purpose:


 


1.     What
is the purpose of the Plan?


 


The purpose of the Plan is to provide shareholders
of the Corporation with an opportunity to increase their investment in the Corporation by purchasing additional shares of the Corporation’s
Common Stock without paying per share processing fees or other administrative fees of any kind. Shareholders may purchase additional
whole or fractional shares of the Common Stock under the Plan using the cash dividends they receive on their current holdings and
by making optional cash investments.


 


The Plan is not intended to provide shareholders
with a mechanism for generating assured short-term profits through rapid turnover of shares. We reserve the right to amend, suspend
or terminate participation by any shareholder at any time and, in particular, any shareholder who is using our Plan for purposes
inconsistent with the intended purpose of our Plan.


 


Administration:


 


2.     Who
administers the Plan and what are the functions of the Plan Administrator?


 


Computershare Trust Company, N.A., the Corporation’s
transfer agent (“Computershare” or the “Plan Administrator”), will administer the Plan, keep records, send
statements of account to participants and perform other duties relating to the Plan. The Common Stock purchased pursuant to the
Plan will be purchased from the Corporation from Common Stock that is authorized but unissued, or from treasury stock, or purchased
in the open market, or in some combination of these methods in accordance with the Plan. Shares of Common Stock purchased other
than from the Corporation will be purchased by agents independent of the Corporation. All shares of Common Stock purchased pursuant
to the Plan, from the Corporation or otherwise, will be registered in the name of the Plan Administrator’s nominee and credited
to the accounts of the Plan participants by the Plan Administrator. Contact information for Computershare is as follows:


 


Computershare


P.O. Box 30170


College Station, TX 77842-3170


1-800-368-5948


www.computershare.com/investor


 


Participation/Enrollment:


 


3.     Who
is eligible to participate in the Plan?


 


All shareholders of record of the Corporation
are eligible to participate in the Plan.


 


4.     How
does a shareholder enroll in the Plan?


 


Shareholders may enroll in the Plan either
by completing an online Enrollment Form at www.computershare.com/investor or by mailing the form to the Plan Administrator.
The Enrollment Form instructs the Plan Administrator to invest a shareholder’s cash dividends in additional shares of the
Common Stock. If the Plan Administrator receives the Enrollment Form prior to a Dividend Record Date, the Plan will become effective
for the participant as of the related Dividend Payment Date. Otherwise, the Plan will be effective for such participant as of
the next Dividend Payment Date.


 




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Participants enrolled in the Plan, will remain
a participant until the participant discontinues participation, or participation is terminated by the Corporation.


 


5.     Are
there any fees or expenses incurred by participants in the Plan?


 


The Corporation will pay all administrative
fees connected with a shareholder’s participation in the Plan. There are no additional fees or expenses charged to shareholders
who participate in the Plan. Participants in the Plan will not incur any per share processing fees or service charges for purchases
made under the Plan. However, the per share processing fees that we pay on behalf of participants will be treated as dividend income
by the Internal Revenue Service. In addition, there are no charges for the custodial and safekeeping services provided by the Plan
Administrator. A participant in the Plan who requests that the Plan Administrator arrange for the sale of the participant’s
shares held under the Plan will incur service charges and may incur per share processing fees. (See the Question/Answer under the
caption “Sale of Shares from the Plan” on page 7.) In addition, a participant in the Plan may incur certain expenses
if the participant requests that whole shares be sold upon withdrawal from the Plan. (See the Question/Answer under the caption
“Withdrawal” on page 8.)


 


Purchases:


 


6.     When
will purchases be made under the Plan?


 


Purchases of shares of Common Stock will be
made on the relevant investment date or, in the case of open market purchases, as soon thereafter as shall be practicable. When
market transactions are made, the purchases will be made in the sole discretion of the Plan Administrator, which will use its best
efforts to make the purchases promptly, commencing on the relevant investment date and ending in most instances not later than
30 days after such investment date. Neither the Corporation nor any of our affiliates nor any participant will have any authority
or power to direct the time or price at which shares may be purchased or the selection of the broker or dealer through or from
whom purchases are to be made.


 


No interest will be paid on optional cash payments
pending investment in shares of Common Stock by the Corporation or the Plan Administrator.


 


7.     How
will purchases of Common Stock under the Plan be made?


 


All purchases of Common Stock under the Plan
will be made either directly from the Corporation out of its treasury stock or out of its legally authorized, but unissued shares
of Common Stock or through open market purchases, or any combination thereof, by agents independent of the Corporation and its
affiliates.


 


The Corporation will use a participant’s
cash dividend to purchase whole and fractional shares of Common Stock and credit the shares to such participant’s account.
Dividends on the shares credited to a participant’s account will be reinvested, thereby compounding the participant’s
investment. The Plan will apply to all shares of Common Stock that are registered to a participant at the time of enrollment, plus
all shares that the participant acquires while the authorization remains in effect.


 


Purchases of shares of Common Stock made with
optional cash investments from participants will be made, in our discretion, either directly from the Corporation or on the open
market. Shares purchased directly from the Corporation will either be authorized but unissued shares or shares held in our treasury.


 




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8.     What
is the purchase price per share of Common Stock under the Plan?


 


The purchase price of shares of Common Stock
purchased by a participant under the Plan with any reinvested dividends on the date any dividend is paid (the “Dividend Payment
Date”) shall be 95% of the market price of shares of Common Stock, subject to adjustment as determined by the Board of Directors.
The purchase price of shares of Common Stock purchased by a participant under the Plan with optional cash investments shall be
100% of the average market price of shares of Common Stock. The price of shares of Common Stock purchased from the Corporation
will be the average closing price of shares of Common Stock as quoted on the Nasdaq Capital Market for the trailing 14 trading
days immediately preceding the applicable investment date. The price of shares of Common Stock purchased in the open market will
be the weighted average purchase price of such shares. In the event that the purchase of shares of Common Stock is fulfilled by
a combination of the Corporation’s authorized and unissued shares, the Corporation’s treasury stock and open market
purchases or any combination thereof, the price will be a weighted average of these prices. The shares will be purchased from either
the authorized but unissued shares of Common Stock held by the Corporation, the Corporation’s treasury stock and/or on the
open market, or any combination thereof, by agents independent of the Corporation and its affiliates. (See the disclosure under
the caption “INVESTMENT CONSIDERATIONS”).


 


9.     How
many shares of Common Stock will be credited to participants?


 


Each participant’s account will be credited
with that number of shares of Common Stock, including fractions computed to six decimal places, equal to the amounts to be invested
on behalf of the participant divided by the applicable purchase price computed to six decimal places.


 


Optional Cash Investments:


 


10.   How
does the optional cash investment feature of the Plan work?


 


Each calendar month, the Plan Administrator
will apply any optional cash payment in good funds timely received from a participant - generally, received by the Plan Administrator
the business day prior to the 15th day (or, if the 15th day is not a business day for the Corporation, the
first business day for the Corporation immediately following the 15th day) of the calendar month in which it is to be
invested - to the purchase of Common Stock for the account of the participant on the following investment date, if such Common
Stock is purchased from the Corporation and on, or as soon as determined by the Plan Administrator after, such investment date
if such Common Stock is purchased on the open market.


 


A participant may not make optional cash investments
of less than $100 per calendar month or of more than $50,000 in any calendar year. In the event that a participant delivers an
optional cash investment other than in the amount permitted, the Plan Administrator will invest only that portion, if any, that
complies with such investment limitation and will return the remainder. The minimum and maximum amounts of optional cash investment
purchases may be changed (or the optional cash investment feature may be eliminated) at the discretion of the Corporation’s
Board of Directors.


 


11.   What
are the investment dates and record dates for optional cash investments?


 


Optional cash investments will be invested each
month. The investment date for optional cash investments is the 15th day of each calendar month or, if such day is not
a business day for the Corporation, the first business day for the Corporation immediately following that date will be the investment
date.


 


12.   When
must optional cash investments be received?


 


The Plan Administrator must be in receipt of
good funds on or before the business day prior to the investment date in order for such funds to be invested as an optional cash
investment on the next investment date. Optional cash investments may be made by check made payable to the Plan Administrator.
All checks must be in U.S. funds and drawn on a U.S. bank or U.S. bank affiliate. The Plan Administrator will not accept cash,
traveler’s checks, money orders or third-party checks.


 


No interest will be paid by the Corporation
or the Plan Administrator on optional cash investments held pending investment. Therefore, although optional cash investments may
be made at any time, it is advisable to transmit such payments shortly before the applicable investment date.


 




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In order for such payments to be invested on
the investment date, in addition to the receipt of good funds, a participant must be enrolled in the Plan before or at the time
of the investment.


 


A participant may authorize a one-time online
bank debit (in U.S. dollars) from a U.S. bank account by submitting a request online at www.computershare.com/investor.


 


Alternatively, if a participant wishes to make
regular monthly optional cash purchases, they may authorize automatic deductions from their bank account. This feature enables
a participant to make ongoing investments in an amount that is comfortable for them, without having to write a check.


 


To initiate automatic monthly deductions, a
participant must complete and sign a Direct Debit Authorization form and return it to the Plan Administrator. Direct Debit Authorization
forms may be obtained from the Plan Administrator. A participant may also initiate automatic monthly investments by accessing their
account online at www.computershare.com/investor. Forms will be processed and become effective as promptly as practicable; however,
a participant should allow four to six weeks for the first investment to be initiated using the automatic investment feature.


 


Once a participant’s automatic monthly
investment is initiated, funds will be drawn from the designated bank account on the 10th day of each month (or the next banking
business day if the 10th day is not a banking business day). Participants may change their automatic monthly investment by completing
and submitting to the Plan Administrator a new Direct Debit Authorization form or by accessing their account online at www.computershare.com/investor.
To be effective with respect to a particular Investment Date, however, the new instructions must be received by the Plan Administrator
at least six business days prior to such Investment Date. Automatic deductions will continue indefinitely until a participant notifies
the Plan Administrator in writing or online that the automatic deductions are to stop.


 


In the event that any check, draft or electronic
funds transfer a participant may tender or order as payment to the Plan Administrator for optional cash investments of Common Stock
is dishonored, refused or returned, a participant agrees that the purchased shares when credited to their account may be sold,
on the Plan Administrator’s order without a participant’s consent or approval, to satisfy the amount owing on the purchase.
The “amount owing” will include the purchase price paid, any purchase and sale transaction fees, any per share fees
and the Plan Administrator’s returned check or failed electronic payment fee of $35. If the sale proceeds of purchased shares
are insufficient to satisfy the amount owing, the participant authorizes the Plan Administrator to sell additional shares then
credited to their account as necessary to cover the amount owing, without further consent or authorization from the participant.
The Plan Administrator may sell shares to cover an amount owing as a result of the participant’s order in any manner consistent
with applicable securities laws. Any sale for that purpose in a national securities market would be commercially reasonable. The
participant grants the Plan Administrator a security interest in all shares credited to the participant’s account including
securities subsequently acquired and held or tendered for deposit, for purposes of securing any amount owing as described in this
paragraph.


 


13.   May
optional cash investments be returned to a participant?


 


Upon a participant’s written request received
by the Plan Administrator no later than two business days prior to the Investment Date, a cash payment not already invested under
the Plan will be cancelled or returned to the participant, as appropriate. However, no refund of a check will be made until the
funds have been actually received and collected by the Plan Administrator. Accordingly, such refunds may be delayed.


 


Certificates for Shares:


 


14.   Will
certificates be issued for shares of Common Stock purchased under the Plan?


 


The shares of Common Stock purchased under the
Plan will be held by Computershare in a participant’s account without charge. Upon receipt of a written request from a participant,
Computershare will issue a certificate or certificates representing the whole shares of Common Stock in such participant’s
account. There may be a fee for certificate issuance.


 




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15.   In
whose name will certificates be registered when issued?


 


Accounts will be maintained under the Plan in
the names in which certificates of participants were registered at the time the participants entered the Plan. We will register
certificates for whole shares in the same manner when issued at the request of a participant.


 


16.   What
happens if a participant sells all of the shares for which the participant has received a certificate?


 


If a participant sells all of his or her shares
for which such participant has a certificate, but participation in the Plan is not terminated, dividends on the shares held in
the participant’s account under the Plan will continue to be invested.


 


Sale of Shares from the Plan:


 


17.   How
may a participant sell shares of Common Stock held under the Plan?


 


Yes. A participant can sell some or all of the
shares credited to their Plan account by contacting the Plan Administrator. The participant has the following four choices when
making a sale, depending on how they submit their sale request:


 


•           Market Order. A market order is a
request to sell shares of Common Stock promptly at the current market price. Market order sales are only available through the
Investor Centre at www.computershare.com/investor or by calling the Plan Administrator directly at 1-800-368-5948. Market order
sale requests will be placed promptly upon receipt during market hours (normally 9:30 a.m. to 4:00 p.m. Eastern Standard Time).
Market order sale requests received by the Plan Administrator during market hours are final and cannot be stopped or cancelled.
Market order sale requests received outside of market hours will be submitted to the Plan Administrator’s broker on the next
day the market is open. The Plan Administrator will use commercially reasonable efforts to honor requests by participants to cancel
market orders placed outside of market hours. Depending on the number of shares being sold and current trading volume in the shares,
a market order may only be partially filled or not filled at all on the trading day in which it is placed, in which case the order,
or remainder of the order, as applicable, will be cancelled at the end of such day. To determine if their shares were sold, a participant
should check their account online at www.computershare.com/investor or call the Plan Administrator directly at 1-800-393-5809.
If the participant’s market order sale was not filled and the participant still wants the shares to be sold, the participant
will need to re-enter the sale request. Sales proceeds will equal the market price of the sale obtained by the Plan Administrator’s
broker, less a service fee of $25.00 and a processing fee of $0.12 per share sold.


 


•           Batch Order. A batch order is an accumulation
of all sales requests for shares of Common Stock submitted together as a collective request. Batch orders are submitted on each
market day, assuming there are sale requests to be processed. Sale instructions for batch orders received by the Plan Administrator
will be processed no later than five business days after the date on which the order is received (except where deferral is required
under applicable federal or state laws or regulations), assuming the applicable market is open for trading and sufficient market
liquidity exists. All sale requests received in writing will be submitted as batch order sales, unless such requests specify otherwise.
Batch order sales may only be requested in writing. In every case of a batch order sale, the price to each selling participant
shall be the weighted average sale price obtained by the Plan Administrator’s broker for each aggregate order placed by the
Plan Administrator and executed by the broker, less a service charge of $15.00 and a processing fee of $0.12 per share sold.


 


•           Day Limit Order. A day limit order
is an order to sell shares of Common Stock when and if they reach a specific trading price on a specific day. The order is automatically
cancelled if the price is not met by the end of that day (or, for orders placed after-market hours, the next day the market is
open). Depending on the number of shares of Common Stock being sold and the current trading volume in the shares, such an order
may only be partially filled, in which case the remainder of the order will be cancelled. The order may be cancelled by the applicable
stock exchange, by the Plan Administrator at its sole discretion or, if the Plan Administrator’s broker has not filled the
order, at the participant’s request made online at www.computershare.com/investor or by calling the Plan Administrator directly
at 1-800-393-5809. A service fee of $25.00 and a processing fee of $0.12 per share sold will be deducted from the sale proceeds.


 




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•           Good-Til-Cancelled (‘‘GTC’’)
Limit Order. A GTC limit order is an order to sell shares of Common Stock when and if the shares reach a specific trading price
at any time while the order remains open (generally up to 30 days). Depending on the number of shares being sold and current trading
volume in the shares, sales may be executed in multiple transactions and over more than one day. If an order remains open for more
than one day during which the market is open, a separate fee will be charged for each such day. The order (or any unexecuted portion
thereof) is automatically cancelled if the trading price is not met by the end of the order period. The order may be cancelled
by the applicable stock exchange, by the Plan Administrator at its sole discretion or, if the Plan Administrator’s broker
has not filled the order, at the participant’s request made online at www.computershare.com/investor or by calling the Plan
Administrator directly at 1-800-393-5809. A service fee of $25.00 and a processing fee of $0.12 per share sold will be deducted
from the sale proceeds.


 


All per share fees described in this Question
17 include any brokerage commissions the Plan Administrator is required to pay. All sales requests processed over the telephone
by a customer service representative entail an additional fee of $15.00. Fees are deducted from the proceeds derived from the sale.
The Plan Administrator may, under certain circumstances, require a transaction request to be submitted in writing. Please contact
the Plan Administrator to determine if there are any limitations applicable to the participant’s particular sale request.


 


Alternatively, a participant may choose to sell
their shares through a broker-dealer of their choice, in which case the participant will have to request that the Plan Administrator
either (a) electronically transfer the participant shares to their broker, or (b) issue the shares in certificate form for delivery
to the participant’s broker before settlement of the sale. Please note that only whole shares can be transferred or issued
in certificate form.


 


If all shares held for a participant in the
Plan are sold, the participant’s participation in the Plan will be terminated.


 


The Plan Administrator reserves the right to
decline to process a sale if it determines, in its sole discretion, that supporting legal documentation is required. In addition,
no one will have any authority or power to direct the time or price at which shares under the Plan are sold and no one, other than
the Plan Administrator, will select the broker(s) or dealer(s) through or from whom sales are to be made.


 


Withdrawal:


 


18.   How
does a participant withdraw from the Plan?


 


A participant may withdraw from the Plan at
any time and for any reason by telephone, written notice to the Plan Administrator, or by accessing the participant’s account
online at www.computershare.com/investor.


 


19.   What
happens to a participant’s shares and fractions of shares when the participant withdraws from the Plan?


 


When a participant withdraws from the Plan,
Computershare will move any whole shares in the Plan account to a Direct Registration System (“DRS”) book-entry account
and provide the participant with a DRS statement showing r the total number of whole shares credited to such participant’s
account under. In addition, a check for any fraction of a share of Common Stock valued at the then current market price of the
Common Stock will be mailed directly to the participant. The cash payment will be based on the market price of Common Stock on
the effective date of the withdrawal, less any service and per share fees.


 


Other Information:


 


20.   How
will a participant’s Common Stock be voted at meetings of shareholders of the Corporation?


 


Each participant will have the sole right to
vote any shares including fractional shares purchased for such participant’s account under the Plan on the record date for
a vote. A participant may vote in person at meetings or by submitting a proxy to direct one or more individuals to vote on the
participant’s behalf. Participants under the Plan who are registered holders of Common Stock will receive only one proxy,
which will include any shares credited to such participant’s account. Shares of Common Stock for which no proxy is received
will not be voted.


 




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21.   Who
interprets and regulates the Plan?


 


The Corporation interprets and regulates the
Plan. The terms, conditions, and operations of the Plan are governed by the laws of the State of New Jersey.


 


22.   What
reports will be sent to participants in the Plan?


 


Computershare will provide each participant
with an account statement each time shares of Common Stock are purchased or sold for the participant under the Plan. The statement
will show the total number of whole and fractional shares in the participant’s account as of a certain date, as well as the
amount of the most recent dividend, the number of shares of Common Stock purchased or sold and the price per share.


 


Dividends on the accumulated shares and fees
paid on each participant’s behalf by the Corporation will be included in an information tax return filed with the Internal
Revenue Service. A copy of this return will also be supplied to participants.


 


In addition, each participant will receive a
copy of each communication sent generally to holders of Common Stock.


 


23.   May
the Plan be amended, suspended or terminated?


 


The Plan may be amended, supplemented or terminated
by the Corporation at any time by the delivery of written notice to each participant at least 30 days prior to the effective date
of the amendment, supplement or termination. Any amendment or supplement shall be deemed to be accepted by the participant unless
prior to its effective date, the Corporation receives written notice of termination of the participant’s account under the
Plan. In addition, if a participant withdraws transfers or sells all of the participant’s whole shares, leaving only a fractional
share in his or her account, the Plan Administrator may, in its discretion and without notice to the participant, terminate the
participant’s participation in the Plan and sell any fractional share as a batch order sale.


 


24.   What
is the responsibility of the Corporation under the Plan?


 


Neither the Corporation nor Computershare nor
their respective officers, directors, employees and agents shall have any responsibility beyond the exercise of ordinary care for
any action taken or omitted pursuant to the Plan; nor shall they be liable for any act done in good faith or for any good faith
omission to act; nor shall they have any liability in connection with an inability to purchase or sell shares of Common Stock or
with respect to the timing or the price of any purchase or sale of shares of Common Stock.


 


25.   How
is a stock dividend or stock split handled under the Plan?


 


Any stock dividend or stock split applicable
to shares of Common Stock registered in the name of the Plan Administrator’s nominee and held for a participant in his or
her account under the Plan will be credited to the participant’s account. Any stock dividend or stock split shares distributed
with respect to shares of Common Stock that are registered in a participant’s name and held in book-entry form, will be credited
to the account in the participant’s name on the books of the Corporation maintained by the Corporation’s transfer agent,
Computershare, in the same manner as to shareholders not otherwise participating in the Plan. In the event that the Corporation
makes available to shareholders rights to purchase additional shares of Common Stock or other securities, participants under the
Plan will receive a subscription warrant for such purchase rights directly from the Corporation.


 


26.   Where
should correspondence regarding the Plan be directed?


 


All correspondence regarding the Plan should
be addressed to the Plan Administrator as follows:


Computershare


P.O. Box 30170


College Station, TX 77842-3170


 




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INVESTMENT CONSIDERATIONS


 


Investing in our Common Stock involves risks.
Before making an investment decision, you should carefully consider the risks described under the caption “Risk Factors”
in our most recent Annual Report on Form 10-K and any updates to those Risk Factors contained in our Quarterly Reports on Form
10-Q following the most recent Form 10-K and in all other information appearing in this Prospectus, any Prospectus supplements
or incorporated by reference into this Prospectus. The material risks and uncertainties that management believes affect the Corporation
are described in those documents. In addition to those risk factors, there may be additional risks and uncertainties of which management
is not aware or focused on or that management deems to be immaterial. Our business, financial condition or results of operations
could be materially adversely affected by any of these risks. The trading price of our securities could decline due to any of these
risks and you may lose all or part of your investment. This Prospectus is qualified in its entirety by these risk factors.


 


Risk Factors Related to the Offering


 


Because the 5% discount on shares of Common Stock purchased from
the Corporation is based on the average market price of Common Stock for the trailing 14 trading days, the purchase price of the
shares when compared to the closing price of Common Stock on the investment date may not reflect a discount.


 


Under the terms of the Plan, shares of Common
Stock purchased from the Corporation will be sold at a 5% discount to the average closing price of our Common Stock as quoted on
the Nasdaq Capital Market for the trailing 14 trading days immediately preceding the investment date, subject to adjustment as
determined by the Board of Directors. Because the closing price of Common Stock on the Nasdaq Capital Market fluctuates from day
to day, and we are using a 14-day average, the price of the shares which are purchased for the participant when compared to the
closing price of Common Stock on the investment date may reflect a discount of less than 5% or it may reflect a discount of more
than 5% or it may reflect a premium to the closing price on the investment date. Accordingly, while we have designed the Plan to
provide an economic benefit to the participant, we cannot assure that the participant will receive an economic benefit from the
5% discount.


 


The shares of Common Stock purchased under the Plan are not deposit
accounts and are not insured.


 


The shares of Common Stock purchased under the
Plan are not deposit accounts of the Bank and are not insured by the Federal Deposit Insurance Corporation or any other governmental
organization. A participant’s investment in shares of Common Stock held in the Plan is no different than an investment in
directly-held shares of Common Stock and the participant bears the market risk of loss and the benefits of gain from market price
changes for all of the shares.


 


U.S. FEDERAL INCOME TAX TREATMENT


 


In general, for Federal income tax purposes,
participants in the Plan who have their cash dividends reinvested in Common Stock under the Plan will be treated the same as non-participants
with respect to the cash dividends on their shares of Common Stock which are reinvested in Common Stock under the Plan. All participants
in the Plan will be treated as having received on each Dividend Payment Date, the full amount of the cash dividend for that Dividend
Payment Date regardless of whether the cash dividends are actually received or are applied to the purchase of shares of Common
Stock under the Plan.


 




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Participants in the Plan who have their cash
dividends reinvested in Common Stock will also be treated as if they actually received a cash dividend to the extent and in the
amount that any administrative fees are paid by the Corporation on their behalf. In addition, such participants will also be treated
as if they actually received a cash dividend to the extent that any Common Stock is purchased from the Corporation at a discount.
Such cash dividend will be equal to the amount of the difference between the fair market value of the Common Stock purchased and
the purchase price. For example, if a participant would have received a cash dividend of $95 but elected to reinvest the dividend
and purchase stock from the Corporation at a 5% discount, the taxable dividend would be $100 representing the fair market value
of the Common Stock received on the distribution date. The 5% discount to market price for shares issued through dividend reinvestment
is subject to adjustment or elimination at any time as determined by the Board of Directors. Each participant in the Plan who has
his or her cash dividends reinvested in Common Stock will have a tax basis in the shares of Common Stock purchased equal to the
amount of cash dividends applied to the purchase of such shares of Common Stock plus any administrative fees and the amount of
the discount described above which was treated as a cash dividend actually paid to such participant.


 


The above summary is provided for your general
information, however, it does not constitute tax advice and does not purport to be complete or to describe the consequences that
may apply to your personal circumstances. You should consult your tax accountant or personal tax advisor regarding the effect of
participation in the Plan on your personal tax situation.


 




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USE OF PROCEEDS


 


We have no basis for estimating precisely
either the number of shares of our Common Stock that ultimately will be originally issued by the Corporation or the prices at which
such shares will be sold. We propose to use the net proceeds from the sale of such shares, when and as received, for general corporate
purposes including investments in, or extensions of credit to, the Bank. We are unable to estimate the amount of which will be
devoted to any specific purpose.


 


LEGAL MATTERS


 


The validity of the shares of Common Stock
offered hereby is being passed upon for the Corporation by McCarter & English, LLP, Newark, New Jersey.


 


EXPERTS


 


The consolidated financial statements of
Stewardship Financial Corporation as of December 31, 2014 and 2013, and for the years then ended, have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.


 


INDEMNIFICATION


 


Subsection (2) of Section 3-5, Title 14A
of the New Jersey Business Corporation Act (the “NJBCA”) empowers a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative (other than an action by or in the right of the corporation), by reason
of the fact that he is or was a corporate agent (i.e., a director, officer, employee or agent of the corporation or a person serving
at the request of the corporation as a director, officer, trustee, employee or agent of another corporation or enterprise), against
reasonable costs (including attorneys’ fees), judgments, fines, penalties and amounts paid in settlement incurred by him
in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any criminal proceeding, had no reasonable cause to
believe his conduct was unlawful.


 


Subsection (3) of Section 3-5 of the NJBCA
empowers a corporation to indemnify a corporate agent against reasonable costs (including attorneys’ fees) incurred by him
in connection with any proceeding by or in the right of the corporation to procure a judgment in its favor which involves such
corporate agent by reason of the fact that he is or was a corporate agent if he acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be made in respect
of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only
to the extent that the Superior Court of New Jersey or the court in which such action or suit was brought shall determine that
despite the adjudication of liability, such person is fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.


 


Subsection (4) of Section 3-5 of the NJBCA
provides that to the extent that a corporate agent has been successful in the defense of any action, suit or proceeding referred
to in subsections (2) and (3) or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys’ fees) incurred by him in connection therewith.


 


Subsection (5) of Section 3-5 of the NJBCA
provides that a corporation may indemnify a corporate agent in a specific case if it is determined that indemnification is proper
because the corporate agent met the applicable standard of conduct, and such determination is made by any of the following: (a)
the board of directors or a committee thereof, acting by a majority vote of a quorum consisting of disinterested directors; (b)
independent legal counsel, if there is no quorum of disinterested directors or if the disinterested directors empowers counsel
to make the determination; or (c) the shareholders.


 






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Subsection (8) of Section 3-5 of the NJBCA
provides that the indemnification provisions in the law shall not exclude any other rights to indemnification that a director or
officer may be entitled to under a provision of the certificate of incorporation, a by-law, an agreement, a vote of shareholders,
or otherwise. That subsection explicitly permits indemnification for liabilities and expenses incurred in proceedings brought by
or in the right of the corporation (derivative proceedings). The only limitation on indemnification of directors and officers imposed
by that subsection is that a corporation may not indemnify a director or officer if a judgment has established that the director’s
or officer’s acts or omissions were a breach of his or her duty of loyalty, not in good faith, involved a knowing violation
of the law, or resulted in receipt of an improper personal benefit.


 


Subsection (9) of Section 3-5 of the NJBCA
provides that a corporation is empowered to purchase and maintain insurance on behalf of a director or officer against any expenses
or liabilities incurred in any proceeding by reason of that person being or having been a director or officer, whether or not the
corporation would have the power to indemnify that person against expenses and liabilities under other provisions of the law.


 


Article VI of the Corporation’s Restated
Certificate of Incorporation, as amended (the “Certificate of Incorporation”) provides that a director or officer of
the Corporation shall not be personally liable to the Corporation or its shareholders for damages for breach of any duty owed to
the Corporation or its shareholders provided that the a director or officer shall not be relieved from liability for any breach
of duty based upon an act or omission (i) in breach of such person’s duty of loyalty to the Corporation or its shareholders,
(ii) not in good faith or involving a knowing violation of law, or (iii) resulting in receipt by such person of an improper personal
benefit. Article VII further provides that, if the NJBCA is amended to authorize corporate action further eliminating or limiting
the personal liability of directors or officers, then the liability of a director or officer or both of the Corporation shall be
eliminated or limited to the fullest extent permitted under the NJBCA as so amended.


 


Article VII of the 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 fullest extent permitted by the NJBCA.


 


The 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 such article.


 


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 Commission such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.


 


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.


 


INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE


 


The Commission allows us to “incorporate
by reference” information into this Prospectus. This means that we can disclose important information to you by referring
you to another document filed separated with the Commission. This Prospectus incorporates by reference the documents listed below
that we have previously filed with the Commission:


 






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(i)             our Annual Report on Form 10-K for
the fiscal year ended December 31, 2014, including the audited financial statements of and other information with respect to Stewardship
Financial Corporation and its subsidiaries as of December 31, 2014 and 2013, and for each of the years then ended, included therein;


 


(ii)             our proxy statement for our 2015
Annual Meeting of Shareholders, and


 


(iii)             the description of the Corporation’s
Common Stock which is contained in the Corporation’s Registration Statement on Form 8-B, as filed with the Commission on
December 10, 1996.


 


In addition, all documents subsequently
filed by the Corporation with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act 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. Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.


 


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.


 


 



 


STEWARDSHIP FINANCIAL CORPORATION


630 Godwin Avenue


Midland Park, New Jersey 07432-1405


 


Dividend Reinvestment Plan


May 21, 2015


 


PROSPECTUS


 



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