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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-K/A


[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the Fiscal Year Ended December 31, 2004

                                       OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                        Commission File Number: 005-57091


                          FIRST MUTUAL BANCSHARES, INC.
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             (Exact name of registrant as specified in its charter)


State of Washington                                              91-2005970
-------------------------------                              -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)


400 108th Avenue N.E., Bellevue, Washington                         98004
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(Address of principal executive offices)                          (Zip Code)


Registrant's telephone number, including area code             (425) 455-7300
                                                             -------------------

Securities registered pursuant to Section 12(b) of the Act:  None
                                                             ----

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $1.00 per share
                     ---------------------------------------
                                (Title of Class)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   YES [X]   NO [_]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

     Indicate by a check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).   YES [X]   NO [_]

     As of June 30, 2004, there were issued and outstanding 5,276,662 shares of
the registrant's common stock. The aggregate market value of the voting stock
held by non-affiliates of 3,113,059 shares of the registrant was $78,604,740
based on the closing sales price of the registrant's common stock as quoted on
the Nasdaq Market System which on June 30, 2004 was $25.25.

     As of April 21, 2005, there were issued and outstanding 5,308,294 shares of
the registrant's common stock.

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                                EXPLANATORY NOTE

First Mutual Bancshares, Inc. (the "Company") is filing this Amendment No. 1 to
Form 10-K to amend its Form 10-K for the year ended December 31, 2004, filed
with the Securities and Exchange Commission ("SEC") on March 16, 2005 (the
"Original Filing") in accordance with Securities and Exchange Commission Release
No. 34-50754, to:

          o    Replace Item 9A, "Controls and Procedures",
          o    Include management's report on internal control over financial
               reporting and the attestation report of Moss Adams LLP,
               independent registered public accounting firm,
          o    Include a consent of Moss Adams LLP, independent registered
               public accounting firm, with respect to its attestation report,
               and
          o    Replace Exhibits 31.1 and 31.2, certifications pursuant to
               Section 302 of the Sarbanes-Oxley Act of 2002.

Except for the amendments described above, this Amendment to Form 10-K does not
modify the Original Filing.

The Company omitted these reports from the Original Filing in reliance on the
SEC's Order Under Section 36 of the Securities Exchange Act of 1934 Granting an
Exemption from Specified Provisions of Exchange Act Rules 13a-1 and 15d-1, as
set forth in SEC Release No. 34-507543. The Company is filing this Amendment
within the period and in accordance with the other conditions set forth in the
Order.

                                    PART III

ITEM 9A.  CONTROLS AND PROCEDURES
---------------------------------

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

An evaluation of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) of the Securities Exchange Act of 1934 (the "Act")) was carried
out under the supervision and with the participation of the Company's Chief
Executive Officer, Chief Financial Officer, and other members of the Company's
senior management, as of the end of the period covered by this report (the
"Evaluation Date"). Based upon this evaluation, the Company's Chief Executive
Officer and Chief Financial Officer concluded that, as of the Evaluation Date,
the Company's disclosure controls and procedures are effective in providing
reasonable assurance that the material information required to be disclosed by
the Company in the reports it files or submits under the Act is (i) accumulated
and communicated to the Company's management (including the Company's Chief
Executive Officer and Chief Financial Officer) in a timely manner, and (ii)
recorded, processed, summarized, and reported within the time periods specified
in the SEC's rules and forms.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING:

The management of First Mutual Bancshares, Inc. (the Company) is responsible for
establishing and maintaining an adequate system of internal control over
financial reporting in order to provide reasonable assurance regarding the
<PAGE>

integrity, reliability and fair presentation of its published financial
statements and other information presented in the annual report. Pursuant to
Section 404 of the Sarbanes-Oxley Act of 2002, management assessed the design
and effectiveness of its internal control for the year ended December 31, 2004
based upon the criteria related to internal control over financial reporting
described in "Internal Control--Integrated Framework" issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on that
assessment, the Company's management concluded that the Company's internal
control over financial reporting was effective as of December 31, 2004.

The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America and, as such,
include amounts based on informed judgments and estimates made by management.
Even though estimates and judgments are used, we believe we have taken measures
to provide reasonable assurance of the integrity and reliability of the
financial information contained in the annual report. These measures include an
effective control-oriented environment in which the internal audit function
plays an important role and the Audit Committee of the Board of Directors
oversees the financial reporting process.

Management's internal control system is augmented by written policies and
procedures and by audits performed by the internal audit staff, which monitor
the operations of the internal control system and report findings to management
and the Audit Committee. When appropriate, corrective actions are taken to
address identified control deficiencies and other opportunities for improving
the system. However, it should be noted that all internal control systems, no
matter how well designed, have inherent limitations and even those systems
determined to be effective can provide only reasonable assurance regarding
financial statement preparation and presentation.

In the opinion of management, the financial statements and other information in
the annual report present fairly the financial condition and operations of the
Company at the dates indicated on such financial reports in conformity with
accounting principles generally accepted in the United States of America.

Our independent registered public accounting firm, which audits our financial
statements, also attested to, and reported on, management's assessment and on
the effectiveness of internal control over financial reporting. The independent
registered public accounting firm's attestation report is included in this Form
10-K/A.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER
FINANCIAL REPORTING

To the Board of Directors and Shareholders of
First Mutual Bancshares, Inc. and Subsidiaries

We have audited management's assessment, included in the accompanying
Management's Report on Internal Control Over Financial Reporting, that First
Mutual Bancshares, Inc. and Subsidiaries (First Mutual Bancshares, Inc. or the
Company) maintained effective internal control over financial reporting as of
December 31, 2004, based on criteria established in Internal Control Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (the COSO criteria). The Company's management is responsible for
maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting.
Our responsibility is to express an opinion on management's assessment and an
opinion on the effectiveness of the Company's internal control over financial
reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, evaluating management's assessment, testing
<PAGE>

and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.

A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion, management's assessment that First Mutual Bancshares, Inc.
maintained effective internal control over financial reporting as of December
31, 2004, is fairly stated, in all material respects, based on the COSO
criteria. Also, in our opinion, First Mutual Bancshares, Inc. maintained, in all
material respects, effective internal control over financial reporting as of
December 31, 2004, based on the COSO criteria.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated statement of
financial condition of First Mutual Bancshares, Inc. as of December 31, 2004 and
2003, and the related consolidated statements of income, stockholders' equity
and comprehensive income, and cash flows for each of the three years in the
period ended December 31, 2004 and our report dated February 18, 2005, expressed
an unqualified opinion thereon.

Everett, Washington
April 14, 2005

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING:

There have not been any changes in the Company's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) of the Act) during the
fiscal quarter ended March 31, 2005 that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.


                                     PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
----------------------------------------------------

(a) (1)   Consolidated Financial Statements (*)
          ---------------------------------

          Report of Independent Registered Public Accounting Firm
<PAGE>

          Consolidated Statements of Financial Condition at December 31, 2004
             and 2003
          Consolidated Statements of Income for the three years ended December
             31, 2004
          Consolidated Statements of Stockholders' Equity and Comprehensive
             Income for the three years ended December 31, 2004
          Consolidated Statements of Cash Flows for the three years ended
             December 31, 2004
          Notes to Consolidated Financial Statements

    (2)   All required financial statement schedules are included in the Notes
to Consolidated Financial Statements.

    (3)   Exhibits

          (3)     a. Articles of Incorporation (**)
                  b. Bylaws (**)
                  We are parties to certain debt instruments under which the
                  total amount of securities authorized does not exceed 10
                  percent of our total consolidated assets. Pursuant to
                  paragraph 4(iii)(A) of Item 601(b) of Regulation S-K, we agree
                  to furnish a copy of those instruments to the Securities and
                  Exchange Commission upon request.
          (11)    Statement regarding computation of per share earnings.
                  Reference is made to the Company's Consolidated Statements of
                  Income attached as part of Exhibit 13, which are incorporated
                  herein by reference.***
          (13)    2004 Annual Report to Shareholders  ***
          (14)    Code of Business Conduct and Ethics adopted February 26,
                  2004 **
          (21)    Subsidiaries ***
          (23.1)  Consent of Moss Adams LLP, Independent Registered Public
                  Accounting Firm ***
          (23.2)  Consent of Moss Adams LLP, Independent Registered Public
                  Accounting Firm ****
          (31.1)  Certification of Chief Executive Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002 ****
          (31.2)  Certification of Chief Financial Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002 ****
          (32.0)  Certification of Chief Executive Officer and Chief Financial
                  Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
                  of 2002 ***

(*)       Incorporated by reference from 2004 Annual Report to Shareholders as
          Exhibit 13.
(**)      Incorporated by reference to the Current Report on Form 8-K filed with
          the SEC on September 21, 2000.
(***)     Previously filed as an exhibit to the Company's Annual Report on Form
          10-K for the year ended December 31, 2004.
(****)    Filed herewith.
<PAGE>

                                   SIGNATURES

          Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       FIRST MUTUAL BANCSHARES, INC.

DATE:  April 26, 2005                  BY: /s/John R. Valaas
                                       -----------------------------------------
                                       John R. Valaas, President and Chief
                                       Executive Officer and Duly Authorized
                                       Representative

          Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

By: /s/ Roger A. Mandery               By: /s/ Victor E. Parker
    -----------------------------          -----------------------------
    Roger A. Mandery                       Victor E. Parker
    Principal Financial Officer            Director

Date:  April 26, 2005                  Date:  April 26, 2005

By: /s/ Kari A. Stenslie               By: /s/ George W. Rowley, Jr.
    -----------------------------          -----------------------------
    Kari A. Stenslie                       George W. Rowley, Jr.
    Principal Accounting Officer           Director

Date:  April 26, 2005                  Date:  April 26, 2005

By: /s/ F. Kemper Freeman, Jr.         By: /s/ Richard S. Sprague
    -----------------------------          -----------------------------
    F. Kemper Freeman, Jr.                 Richard S. Sprague
    Chairman of the Board                  Director

Date:  April 26, 2005                  Date:  April 26, 2005

By: /s/ James J. Doud, Jr.             By: /s/ John R. Valaas
    -----------------------------          -----------------------------
    James J. Doud, Jr.                     John R.  Valaas
    Director                               Director

Date:  April 26, 2005                  Date:  April 26, 2005

By: /s/ Mary Case Dunnam               By: /s/ Robert C. Wallace
    -----------------------------          -----------------------------
    Mary Case Dunnam                       Robert C. Wallace
    Director                               Director
<PAGE>

Date:  April 26, 2005                  Date:  April 26, 2005

By: /s/ Janine Florence                By: /s/ Robert J. Herbold
    -----------------------------          -----------------------------
    Janine Florence                        Robert J. Herbold
    Director                               Director

Date:  April 26, 2005                  Date:  April 26, 2005