Stewardship Financial Corporation Announces Earnings for

MIDLAND PARK, NJ--(Marketwired - July 30, 2015) - Stewardship Financial Corporation (NASDAQ: SSFN), parent of Atlantic Stewardship Bank, announced net income for the three and six months ended June 30, 2015 of $1.2 million and $2.1 million, respectively, as compared to net income of $726,000 and $1.2 million for the three and six months ended June 30, 2014, respectively. After dividends on preferred stock, net income available to common shareholders was $1.8 million, or $0.30 per common share, for the first six months of 2015 compared to $890,000, or $0.15 per common share, for the comparable period of 2014.

Commenting on the quarter and year-to-date numbers, Paul Van Ostenbridge, Stewardship Financial Corporation's President and Chief Executive Officer stated, "Our results continue to demonstrate our ability to generate improving earnings. The strong loan growth we have seen for the last few quarters continues -- with growth in the loan portfolio of $29.8 million for the first six months of 2015, or 12.5% on an annualized basis. In addition, results benefited from continued improvement in asset quality."

Operating Results
The Corporation reported net interest income of $5.5 million and $10.9 million for the three and six months ended June 30, 2015, compared to $5.4 million and $10.7 million for the equivalent prior year periods.

Contributing to the improving results was the growth in average interest earning assets partially offset by reduced margins. The net interest margin was 3.40% for both the three and six months ended June 30, 2014 compared to 3.51% and 3.45% for the three and six months ended June 30, 2014, respectively. "Financial institutions, including the Corporation, continue to operate in this prolonged low interest rate environment where margins are generally expected to remain flat or show slight declines," said Van Ostenbridge.

Noninterest income was reported at $882,000 and $1.8 million for the three and six months ended June 30, 2015, respectively, compared to $807,000 and $1.2 million for the equivalent prior year periods. The current year periods reflect increases in fees and service charges of $53,000 and $111,000 when compared to 2014. In addition, gains on sales of mortgage loans increased over the prior year three and six month periods as the Corporation has returned to selling the majority of residential loan production. Another positive factor was noninterest income for the six months ended June 30 2015 included gains of $152,000 from the sale of available for sale securities and $53,000 from the sale of other real estate owned. The prior year period included a loss of $241,000 from the sale of nonperforming loans.

For both 2015 and 2014, total noninterest expenses of amounted to $5.1 million and $10.2 million for the three and six month periods, respectively. The Corporation remains committed to controlling expenses even as growth in the balance sheet is achieved.

Asset Quality
For the three and six months ended June 30, 2015, results were positively impacted by the Corporation recording negative provisions for loan losses of $600,000 and $700,000, respectively. There were no provisions for loan losses recorded in either the three or six months ended June 30, 2014. During 2015, the Corporation recorded $299,000 and $397,000 for the three and six month periods, respectively, of net recoveries of previously charged off loan balances. Furthermore, nonperforming loans continue to decline and were $2.5 million, or 0.50% of total loans at June 30, 2015 compared to $3.6 million, or 0.76%, at December 31, 2014 and $4.9 million, or 1.13%, a year earlier. Total nonperforming assets of $2.8 million, which includes other real estate owned, also showed continued improvement and represented just 0.39% of total assets at June 30, 2015 compared to 0.71% and 0.91% at December 31, 2014 and June 30, 2014, respectively.

Balance Sheet / Financial Condition
As of June 30, 2015, total assets reached $701.2 million, reflecting a slightly larger balance sheet when compared to assets of $693.6 million at December 31, 2014. A $29.8 million increase in gross loans for the first half of 2015 resulted from new loan originations, partially offset by normal principal amortization. As previously reported, early in 2015, the Corporation identified and sold approximately $27.8 million of available for sale securities with higher price volatility thus providing a portion of the funding for the loan growth while still continuing to manage overall asset growth.

Total deposits grew to $586.0 million at June 30, 2015, an increase of $29.5 million when compared to deposits of $556.5 million at December 31, 2014. Van Ostenbridge noted, "We are now focused on building on this growth in deposits to fund loan growth."

In general, as a result of an increase in deposits, other borrowings decreased $21.7 million to $45.0 million at June 30, 2015. Other borrowings assist the Corporation in managing against rising interest rates through the extension of liabilities and enable us to handle temporary deposit outflows.

At June 30, 2015, capital levels continue to significantly exceed the regulatory capital requirements for a "well capitalized" institution with a tier 1 leverage ratio of 9.90% (4% requirement) and total risk based capital ratio of 14.47% (8% requirement).

About Stewardship Financial Corporation
Stewardship Financial Corporation's subsidiary, the Atlantic Stewardship Bank, has 12 banking offices in Midland Park, Hawthorne (2), Montville, North Haledon, Pequannock, Ridgewood, Waldwick, Wayne (2), Westwood and Wyckoff, New Jersey. The bank is known for tithing 10% of its pre-tax profits to Christian and local charities. To date, the Bank's tithe donations total $8.2 million.

We invite you to visit our website at www.asbnow.com for additional information.

The information disclosed in this document contains certain "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and may be identified by the use of such words as "believe," "expect," "anticipate," "should," "plan," "estimate," and "potential." Examples of forward looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of the Corporation that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include: changes in general, economic and market conditions, legislative and regulatory conditions, or the development of an interest rate environment that adversely affects the Corporation's interest rate spread or other income anticipated from operations and investments.


Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)

			June 30,			March 31,			December 31,			September 30,			June 30,
			2015			2015			2014			2014			2014

Selected Financial Condition Data:
	Cash and cash equivalents		$	19,782		$	21,035		$	10,086		$	10,850		$	14,630
	Securities available for sale			90,850			94,553			124,918			138,255			144,459
	Securities held to maturity			58,363			55,811			55,097			54,234			54,225
	FHLB Stock			2,833			3,026			3,777			2,882			2,429
	Loans receivable:
		Loans receivable, gross		507,105			490,087			477,320			443,006			433,198
		Allowance for loan losses		(9,299	)		(9,600	)		(9,602	)		(10,094	)		(9,825	)
		Other, net		(132	)		(7	)		(19	)		(17	)		40
	Loans receivable, net			497,674			480,480			467,699			432,895			423,413

	Loans held for sale			1,416			798			-			364			259
	Other assets			30,273			30,114			31,974			33,072			32,107
	Total assets		$	701,191		$	685,817		$	693,551		$	672,552		$	671,522


	Noninterest-bearing deposits		$	153,546		$	141,406		$	136,721		$	140,345		$	143,711
	Interest-bearing deposits			432,453			424,916			419,755			416,666			422,669
	Total deposits			585,999			566,322			556,476			557,011			566,380
	Other borrowings			45,000			50,000			66,700			46,800			31,000
	Securities sold under agreements to repurchase			-			-			-			100			7,601
	Subordinated debentures			7,217			7,217			7,217			7,217			7,217
	Other liabilities			2,123			2,166			4,189			4,166			2,329
	Total liabilities			640,339			625,705			634,582			615,294			614,527
	Shareholders' equity			60,852			60,112			58,969			57,258			56,995
	Total liabilities and shareholders' equity		$	701,191		$	685,817		$	693,551		$	672,552		$	671,522

	Gross loans to deposits			86.54	%		86.54	%		85.78	%		79.53	%		76.49	%

	Equity to assets			8.68	%		8.77	%		8.50	%		8.51	%		8.49	%

Asset Quality Data:
	Nonaccrual loans		$	2,539		$	2,798		$	3,628		$	4,434		$	4,875
	Loans past due 90 days or more and accruing			-			-			-			-			-
	Total nonperforming loans			2,539			2,798			3,628			4,434			4,875
	Other real estate owned			219			320			1,308			2,090			1,225
	Total nonperforming assets		$	2,758		$	3,118		$	4,936		$	6,524		$	6,100


	Nonperforming loans to total loans			0.50	%		0.57	%		0.76	%		1.00	%		1.13	%
	Nonperforming assets to total assets			0.39	%		0.45	%		0.71	%		0.97	%		0.91	%
	Allowance for loan losses to nonperforming loans			366.25	%		343.10	%		264.66	%		227.65	%		201.54	%
	Allowance for loan losses to total gross loans			1.83	%		1.96	%		2.01	%		2.28	%		2.27	%


Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)

			For the three months ended						For the six months ended
			June 30,						June 30,
			2015			2014			2015			2014
Selected Operating Data:
	Interest income		$	6,360		$	6,186		$	12,554		$	12,331
	Interest expense			842			810			1,635			1,649
		Net interest and dividend income		5,518			5,376			10,919			10,682
	Provision for loan losses			(600	)		-			(700	)		-
	Net interest and dividend income
		after provision for loan losses		6,118			5,376			11,619			10,682
	Noninterest income:
		Fees and service charges		557			504			1,036			925
		Bank owned life insurance		101			106			197			202
		Gain on calls and sales of securities		-			-			152			-
		Gain on sales of mortgage loans		55			2			65			14
		Loss on sales of loans		-			-			-			(241	)
		Gain on sales of other real estate owned		-			54			53			54
		Other		169			141			297			252
		Total noninterest income		882			807			1,800			1,206
	Noninterest expenses:
		Salaries and employee benefits		2,688			2,557			5,396			5,235
		Occupancy, net		423			520			890			1,075
		Equipment		165			175			321			363
		Data processing		459			435			912			822
		FDIC insurance premium		117			133			230			344
		Other		1,253			1,286			2,405			2,361
		Total noninterest expenses		5,105			5,106			10,154			10,200
Income before income tax expense				1,895			1,077			3,265			1,688
Income tax expense				673			351			1,126			456
Net income				1,222			726			2,139			1,232
Dividends on preferred stock				171			171			342			342
Net income available to common shareholders			$	1,051		$	555		$	1,797		$	890

Weighted avg. no. of diluted common shares				6,086,474			5,999,897			6,066,191			5,978,511
Diluted earnings per common share			$	0.17		$	0.09		$	0.30		$	0.15

Return on average common equity				9.25	%		5.41	%		8.03	%		4.43	%

Return on average assets				0.71	%		0.44	%		0.63	%		0.37	%

Yield on average interest-earning assets				3.91	%		4.03	%		3.91	%		3.98	%
Cost of average interest-bearing liabilities				0.70	%		0.70	%		0.68	%		0.70	%
Net interest rate spread				3.21	%		3.33	%		3.23	%		3.28	%

Net interest margin				3.40	%		3.51	%		3.40	%		3.45	%


Stewardship Financial Corporation
Selected Consolidated Financial Information
(dollars in thousands, except per share amounts)
(unaudited)

			For the three months ended
			June 30,			March 31,			December 31,			September 30,			June 30,
			2015			2015			2014			2014			2014
Selected Operating Data:
	Interest income		$	6,360		$	6,194		$	6,534		$	6,069		$	6,186
	Interest expense			842			793			767			791			810
		Net interest and dividend income		5,518			5,401			5,767			5,278			5,376
	Provision for loan losses			(600	)		(100	)		(300	)		250			-
	Net interest and dividend income
		after provision for loan losses		6,118			5,501			6,067			5,028			5,376
	Noninterest income:
		Fees and service charges		557			479			568			510			504
		Bank owned life insurance		101			96			103			100			106
		Gain on calls and sales of securities		-			152			165			-			-
		Gain on sales of mortgage loans		55			10			26			32			2
		Loss on sales of loans		-			-			-			-			-
		Gain on sales of other real estate owned		-			53			9			-			54
		Other		169			128			119			122			141
		Total noninterest income		882			918			990			764			807
	Noninterest expenses:
		Salaries and employee benefits		2,688			2,708			2,738			2,624			2,557
		Occupancy, net		423			467			420			439			520
		Equipment		165			156			157			167			175
		Data processing		459			453			447			433			435
		FDIC insurance premium		117			113			103			133			133
		Other		1,253			1,152			1,179			1,193			1,286
		Total noninterest expenses		5,105			5,049			5,044			4,989			5,106
Income before income tax expense				1,895			1,370			2,013			803			1,077
Income tax expense				673			453			712			251			351
Net income				1,222			917			1,301			552			726
Dividends on preferred stock				171			171			171			170			171
Net income available to common shareholders			$	1,051		$	746		$	1,130		$	382		$	555

Weighted avg. no. of diluted common shares				6,086,474			6,045,683			6,030,561			6,026,848			5,999,897
Diluted earnings per common share			$	0.17		$	0.12		$	0.19		$	0.06		$	0.09

Return on average common equity				9.25	%		6.77	%		10.41	%		3.58	%		5.41	%

Return on average assets				0.71	%		0.54	%		0.75	%		0.33	%		0.44	%

Yield on average interest-earning assets				3.91	%		3.90	%		4.04	%		3.85	%		4.03	%
Cost of average interest-bearing liabilities				0.70	%		0.67	%		0.64	%		0.68	%		0.70	%
Net interest rate spread				3.21	%		3.23	%		3.40	%		3.17	%		3.33	%

Net interest margin				3.40	%		3.41	%		3.57	%		3.36	%		3.51	%

Contact Information:

Contact:
Claire M. Chadwick
EVP and Chief Financial Officer
630 Godwin Avenue
Midland Park, NJ 07432
201-444-7100

Stewardship Financial Corporation Announces Earnings for Second Quarter of 2015