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

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

|   | For      the transition period from _____ to_____ |
|--------|---------------------------------------------------|

|  FIRST      FINANCIAL NORTHWEST, INC.                      |
|-----------------------------------------------------------------|
|  Exact name of      registrant as specified in its charter |

| Washington                                                                                       |           26-0610707                                                               |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|
| (State or other      jurisdiction of incorporation                                                                                                                                                                                                                                                                                                                                                                                                                                                |    (I.R.S.      Employer                                                                     |
| or      organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  I.D.      Number)                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                        |
| 201      Wells Avenue South, Renton,      Washington                                                                                                                                                                                                                                                                                                                                                              |                 98057       |
| (Address      of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                |  (Zip      Code)                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                        |
| Registrant’s      telephone number, including area code:                                                                                                                                                                                                                                                                                                                                                                                                                                         |        (425) 255-4400                                                                        |

----

|                      |                                                                                                                                                                    | Page                 |
|---------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|
| Item 1      -   | Consolidated      Financial Statements (Unaudited)                                                                                                  |         3  |
|                      |                                                                                                                                                                    |                      |
| Item 2      -   | Management’s      Discussion and Analysis of Financial Condition         and      Results of Operations    |  15                  |
|                      |                                                                                                                                                                    |                      |
| Item 3      -   | Quantitative and      Qualitative Disclosures About Market Risk                                                                                               | 24                   |
|                      |                                                                                                                                                                    |                      |
| Item 4    -          | Controls and      Procedures                                                                                                                             | 26                   |
|                      |                                                                                                                                                                    |                      |

| PART II - OTHER      INFORMATION |                                                                               |
|----------------------------------|------------------------------------------------------------------------------------|
|                             |                                                                               |   |
| Item 1 -                    | Legal      Proceedings                                                   | 27  |
|                             |                                                                               |   |
| Item    1A-                 | Risk      Factors                                                             |      27 |
|                             |                                                                               |   |
| Item 2      -          | Unregistered Sales      of Equity Securities and Use of Proceeds    | 27  |
|                             |                                                                               |   |
| Item 3      -          | Defaults upon Senior      Securities                                | 27  |
|                             |                                                                               |   |
| Item 4      -          | Submission of      Matters to a Vote of Security Holders                 | 27  |
|                             |                                                                               |   |
| Item 5    -                 | Other      Information                                                   | 27  |
|                             |                                                                               |   |
| Item 6      -          | Exhibits                                                                      | 28  |
|                             |                                                                               |   |
| SIGNATURES        | 29                                                                                 |

----

| FIRST      FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES        |
|--------------------------------------------------------------|
| Consolidated      Balance Sheets                             |
| (Dollars      in thousands, except share data)               |
| (Unaudited)                                                  |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   | March      31, |   |   | December      31, |
| Assets                                                       |   | 2008 |   |   | 2007 |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Cash      on hand and in banks                               | $ | 6,718        |   | $ | 3,675        |
| Interest-bearing      deposits                               |   | 72,434        |   |   | 787        |
| Federal      funds sold                                      |   |   | 6,055        |   |   | 7,115        |
| Investments      available for sale                          |   | 146,488        |   |   | 119,837        |
| Investments      held to maturity (fair value                |   |   |   |   |   |
|                                                         | of      $0 and $81,545) |   | —   |   |   | 80,410        |
| Loans      receivable, net of allowance of $7,971 and $7,971 |   | 923,593        |   |   | 880,664        |
| Premises      and equipment, net                             |   | 13,156        |   |   | 13,339        |
| Federal      Home Loan Bank stock, at cost                   |   | 4,850        |   |   | 4,671        |
| Accrued      interest receivable                             |   | 4,915        |   |   | 5,194        |
| Deferred      tax assets, net                                |   | 6,146        |   |   | 7,093        |
| Goodwill                                                     |   |   |   |   |   | 14,206        |   |   | 14,206        |
| Prepaid      expenses and other assets                       |   | 4,397        |   |   | 3,897        |
|                                                         |   |   |   |   | Total      assets | $ | 1,202,958        |   | $ | 1,140,888        |
| Liabilities      and Stockholders' Equity                    |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                     |   |   |   |   | $ | 765,265        |   | $ | 729,494        |
| Advances      from the Federal Home Loan Bank                |   | 110,000        |   |   | 96,000        |
| Advance      payments from borrowers for taxes               |   |   |   |   |   |
|                                                         | and      insurance |   |   | 5,528        |   |   | 2,092        |
| Accrued      interest payable                                |   | 84        |   |   | 132        |
| Federal      income tax payable                              |   | 1,814        |   |   | 726        |
| Other      liabilities                                       |   |   |   | 4,828        |   |   | 3,158        |
|                                                         |   |   |   |   | Total      liabilities |   | 887,519        |   |   | 831,602        |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Commitments      and contingencies                           |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders'      Equity                                    |   |   |   |   |   |
|                                                         | Preferred      stock, $0.01 par value; authorized 10,000,000 |   |   |   |   |   |
|                                                         |   | shares,      no shares issued or outstanding |   | —   |   |   | —   |
|                                                         | Common      stock, $0.01 par value; authorized 90,000,000 |   |   |   |   |   |
|                                                         |   | shares;      issued and outstanding 22,852,800 |   |   |   |   |   |
|                                                         |   | at      March 31, 2008 and December 31, 2007 |   | 229        |   |   | 229        |
|                                                         | Additional      paid-in capital |   | 224,170        |   |   | 224,181        |
|                                                         | Retained      earnings, substantially restricted |   | 107,241        |   |   | 102,769        |
|                                                         | Accumulated      other comprehensive income (loss), net |   | 313        |   |   | (1,180) |
|                                                         | Unearned      Employee Stock Ownership Plan (ESOP) shares |   | (16,514) |   |   | (16,713) |
|                                                         |   |   |   |   | Total      stockholders' equity |   | 315,439        |   |   | 309,286        |
|                                                         |   |   |   |   |   | Total      liabilities and stockholders' equity | $ | 1,202,958        |   | $ | 1,140,888        |

----

| FIRST      FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES |
|-------------------------------------------------------|
| Consolidated      Statements of Income                |
| (Dollars      in thousands, except share data)        |
| (Unaudited)                                           |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   |   |   |   | Three      Months Ended |
|                                                  |   |   |   |   |   |   |   | March      31, |
|                                                  |   |   |   |   |   |   |   | 2008 |   |   | 2007 |
| Interest      income                                  |   |   |   |   |   |   |
|                                                  | Loans,      including fees | $ | 15,069         |   | $ | 12,699         |
|                                                  | Investments      available for sale |   | 1,653         |   |   | 1,604         |
|                                                  | Investments      held to maturity |   | —     |   |   | 73         |
|                                                  | Tax-exempt      investments held to maturity |   | —     |   |   | 882         |
|                                                  | Federal      funds sold and interest bearing deposits with banks |   | 536         |   |   | 211         |
|                                                  | Dividends      on Federal Home Loan Bank stock |   | 11         |   |   | 5         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Total      interest income | $ | 17,269         |   | $ | 15,474         |
|                                                  |   |   |   |   |   |
| Interest      expense                                 |   |   |   |   |   |
|                                                  | Deposits |   |   |   | 8,079         |   |   | 8,708         |
|                                                  | Federal      Home Loan Bank advances |   | 1,029         |   |   | 2,066         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Total      interest expense | $ | 9,108         |   | $ | 10,774         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Net      interest income |   | 8,161         |   |   | 4,700         |
|                                                  |   |   |   |   |   |
| Provision      for loan losses                        |   | —     |   |   | 600         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Net      interest income after provision for loan losses | $ | 8,161         |   | $ | 4,100         |
|                                                  |   |   |   |   |   |
| Noninterest      income                               |   |   |   |   |   |
|                                                  | Net      gain on sale of investments |   | 1,373         |   |   | —     |
|                                                  | Other |   |   |   |   | (10)        |   |   | 30         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Total      noninterest income | $ | 1,363         |   | $ | 30         |
|                                                  |   |   |   |   |   |
| Noninterest      expense                              |   |   |   |   |   |
|                                                  | Salaries      and employee benefits |   | 1,761         |   |   | 972         |
|                                                  | Occupancy      and equipment |   | 294         |   |   | 248         |
|                                                  | Professional      fees |   | 295         |   |   | 129         |
|                                                  | Data      processing |   | 113         |   |   | 137         |
|                                                  | Other      general and administrative |   | 423         |   |   | 338         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Total      noninterest expense | $ | 2,886         |   | $ | 1,824         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Income      before provision for federal income taxes |   | 6,638         |   |   | 2,306         |
|                                                  |   |   |   |   |   |
| Provision      for federal income taxes               |   | 2,166         |   |   | 548         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Net      income | $ | 4,472         |   | $ | 1,758         |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Basic      earnings per share (1) | $ |                       0.21   |           | $ | N/A   |
|                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   | Diluted      earnings per share (1) | $ |                       0.21   |              | $ | N/A   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |

----

| FIRST      FINANCIAL NORTHWEST, INC.                                           |
|--------------------------------------------------------------------------------|
| AND      SUBSIDIARIES                                                          |
| Consolidated      Statements of Stockholders' Equity and Comprehensive  Income |
| For      the Three Months Ended March 31, 2008                                 |
| (Dollars      in thousands, except share data)                                 |
| (Unaudited)                                                                    |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   | Additional |   |   |   | Other |   | Unearned |   | Total |
|                                                                           |   |   |   |   |   |   |   | Common |   | Paid-in |   | Retained |   | Comprehensive |   | ESOP |   | Stockholders' |
|                                                                           |   |   |   |   |   |   |   | Stock |   | Capital |   | Earnings |   | Income      (Loss) |   | Shares |   | Equity |
| Balances      at December 31, 2007                                             | $ | 229         | $ | 224,181         | $ | 102,769         | $ | (1,180)        | $ | (16,713)        | $ | 309,286         |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           | Net      income |   | —     |   | —     |   | 4,472         |   | —     |   | —     |   | 4,472         |
|                                                                           | Change      in fair value of investments |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   | available      for sale, net of tax of $769 |   | —     |   | —     |   | —     |   | 1,493         |   | —     |   | 1,493         |
|                                                                           |   |   |   | Total      comprehensive income |   |   |   |   |   |   |   |   |   |   |   | 5,965         |
| Allocation      of 19,850 ESOP shares                                          |   | —     |   | (11)        |   | —     |   | —     |   | 199         |   | 188         |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Balances      at March 31, 2008                                                | $ | 229         | $ | 224,170         | $ | 107,241         | $ | 313         | $ | (16,514)        | $ | 315,439         |

----

| FIRST      FINANCIAL NORTHWEST, INC.       |
|--------------------------------------------|
| AND      SUBSIDIARIES                      |
| Consolidated      Statements of Cash Flows |
| (Dollars      in thousands)                |
| (Unaudited)                                |
|                                       |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   | Three      months ended |
|                                       |   |   |   |   |   |   |   | March      31, |
|                                       |   |   |   |   |   |   |   | 2008 |   | 2007 |
| Cash      flows from operating activities: |   |   |   |   |
|                                       | Net      income |   | $ | 4,472        | $ | 1,758        |
|                                       | Adjustments      to reconcile net income to |   |   |   |   |
|                                       |   | net      cash provided by operating activities: |   |   |   |   |
|                                       |   |   | Provision      for loan losses |   | —    |   | 600        |
|                                       |   |   | Depreciation      and amortization of |   |   |   |   |
|                                       |   |   |   | premises      and equipment |   | 183        |   | 180        |
|                                       |   |   | Net      amortization of premiums and |   |   |   |   |
|                                       |   |   |   | discounts      on investments |   | 157        |   | 275        |
|                                       |   |   | ESOP      expense |   | 188        |   | —    |
|                                       |   |   | Net      realized gain on investments |   |   |   |   |
|                                       |   |   |   | available      for sale |   | (1,373)  |   | —    |
|                                       |   |   | Mutual      funds dividends |   | (69)  |   | (72)  |
|                                       |   |   | Loss      from disposal of premises and equipment |   | 22        |   | —    |
|                                       |   |   | Deferred      federal income taxes |   | 178        |   | (686)  |
|                                       |   |   | Cash      provided by (used in) changes in operating |   |   |   |   |
|                                       |   |   |   | assets      and liabilities: |   |   |   |   |
|                                       |   |   |   |   | Other      assets |   | (500)  |   | (105)  |
|                                       |   |   |   |   | Accrued      interest receivable |   | 279        |   | (809)  |
|                                       |   |   |   |   | Accrued      interest payable |   | (48)  |   | (73)  |
|                                       |   |   |   |   | Other      liabilities |   | 1,670        |   | 95        |
|                                       |   |   |   |   | Federal      income taxes |   | 1,088        |   | 1,234        |
|                                       |   |   |   |   |   | Net      cash provided by operating activities | $ | 6,247        | $ | 2,397        |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities: |   |   |   |   |
|                                       |   | Proceeds      from sale of investments |   | 62,551        |   | —    |
|                                       |   | Principal      repayments on investments |   |   |   |   |
|                                       |   |   | available      for sale |   | 8,868        |   | 7,579        |
|                                       |   | Principal      repayments on investments |   |   |   |   |
|                                       |   |   | held      to maturity |   | —    |   | 54        |
|                                       |   | Purchases      of investments available for sale |   | (14,113)  |   | —    |
|                                       |   | Net      increase in loans receivable |   | (42,929)  |   | (33,864)  |
|                                       |   | Purchases      of Federal Home Loan Bank stock |   | (179)  |   | —    |
|                                       |   | Purchases      of premises and equipment |   | (22)  |   | (249)  |
|                                       |   |   |   |   |   | Net      cash provided by (used in) investing activities | $ | 14,176        | $ | (26,480)  |
|                                       |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   | Balance,      carried forward | $ | 20,423        | $ | (24,083)  |

----

| FIRST      FINANCIAL NORTHWEST, INC.                    |
|---------------------------------------------------------|
| AND      SUBSIDIARIES                                   |
| Consolidated      Statements of Cash Flows, continued   |
| (Dollars      in thousands)                             |
| (Unaudited)                                             |
|                                                    |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |   | Three      months ended |
|                                                    |   |   |   |   |   |   |   | March      31, |
|                                                    |   |   |   |   |   |   |   | 2008 |   | 2007 |
|                                                    |   |   |   |   |   | Balance,      brought forward | $ | 20,423        | $ | (24,083)  |
| Cash      flows from financing activities:              |   |   |   |   |
|                                                    | Net      increase in deposits |   | 35,771        |   | 10,525        |
|                                                    | Advances      from the Federal Home Loan Bank |   | 102,000        |   | 17,000        |
|                                                    | Repayments      of advances from the Federal Home |   |   |   |   |
|                                                    |   | Loan      Bank |   | (88,000)  |   | (14,000)  |
|                                                    | Net      increase in advance payments from borrowers |   |   |   |   |
|                                                    |   | for      taxes and insurance |   | 3,436        |   | 854        |
|                                                    |   |   |   |   | Net      cash provided by financing activities | $ | 53,207        | $ | 14,379        |
|                                                    |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |   |   |   | Net      increase (decrease) in cash |   | 73,630        |   | (9,704)  |
| Cash      and cash equivalents:                         |   |   |   |   |
|                                                    | Beginning      of period |   | 11,577        |   | 26,663        |
|                                                    | End      of period |   | $ | 85,207        | $ | 16,959         |
|                                                    |   |   |   |   |   |   |   |   |   |   |
| Supplemental      disclosures of cash flow information: |   |   |   |   |
|                                                    | Cash      paid during the period for: |   |   |   |   |
|                                                    |   | Interest |   | $ | 9,155        | $ | 10,846        |
|                                                    |   | Federal      income taxes | $ | 900        | $ | —    |
| Noncash      transactions:                              |   |   |   |   |
|                                                    | Transfer      from investments held to maturity to |   |   |   |   |
|                                                    |   | investments      available for sale | $ | 80,410        | $ | —    |

----

----

----

|                            |                      |                    |   |               |   |                |                                                                                                       | March      31, 2008 |
|---------------------------------|---------------------------|-------------------------|--------|--------------------|--------|---------------------|------------------------------------------------------------------------------------------------------------|---------------------|
|                            |                      |                    |   |               |   |                |                                                                                                       |                |   | Gross |   | Gross |   |   |
|                            |                      |                    |   |               |   |                |                                                                                                       | Amortized           |   | unrealized |   | unrealized |   |   |
|                            |                      |                    |   |               |   |                |                                                                                                       | cost                |   | gains |   | losses |   | Fair      value |
|                            |                      |                    |   |               |   |                |                    (Dollars in thousands) |
| Mortgage-backed      and        |                      |                    |   |               |   |                |                                                                                                       |                |
|                            | related      investments: |                    |   |               |   |                |                                                                                                       |                |   |
|                            |                      | FNMA      certificates  | $      | 65,174        | $      | 516            | $                                                                                                          | 153            | $ | 65,537        |
|                            |                      | FHLMC      certificates |   | 46,987        |   | 176            |                                                                                                       | 147            |   | 47,016        |
|                            |                      | GNMA      certificates  |   | 9,355         |   | 108            |                                                                                                       | 35             |   | 9,428        |
| Tax-exempt      municipal bonds |                      | 12,726             |   | 435           |   | 307            |                                                                                                       | 12,854         |
| Taxable      municipal bonds    |                      | 1,656              |   | 18            |   | 2              |                                                                                                       | 1,672          |
| U.S.      Government agencies   |                      | 3,926              |   | 100           |   | —   |                                                                                                       | 4,026          |
| Mutual      fund (1)            |                      |                    |   | 6,189         |   | —   |                                                                                                       | 234            |   | 5,955        |
|                            |                      |                    |   |               |   |                | $                                                                                                          | 146,013        | $ | 1,353        | $ | 878        | $ | 146,488        |

|                          |                      |                    |   |               |   |                |                                                                                                       | December      31, 2007 |
|-------------------------------|---------------------------|-------------------------|--------|--------------------|--------|---------------------|------------------------------------------------------------------------------------------------------------|------------------------|
|                          |                      |                    |   |               |   |                |                                                                                                       |                   |   | Gross |   | Gross |   |   |
|                          |                      |                    |   |               |   |                |                                                                                                       | Amortized              |   | unrealized |   | unrealized |   |   |
|                          |                      |                    |   |               |   |                |                                                                                                       | cost                   |   | gains |   | losses |   | Fair      value |
|                          |                      |                    |   |               |   |                |                    (Dollars in thousands) |
| Mortgage-backed      and      |                      |                    |   |               |   |                |                                                                                                       |                   |
|                          | related      investments: |                    |   |               |   |                |                                                                                                       |                   |   |
|                          |                      | FNMA      certificates  | $      | 66,594        | $      | 73             | $                                                                                                          | 1,029             | $ | 65,638        |
|                          |                      | FHLMC      certificates |   | 36,794        |   | 34             |                                                                                                       | 638               |   | 36,190        |
|                          |                      | GNMA      certificates  |   | 10,116        |   | 20             |                                                                                                       | 79                |   | 10,057        |
| U.S.      Government agencies |                      | 2,001              |   | 3             |   | —   |                                                                                                       | 2,004             |
| Mutual      fund (1)          |                      |                    |   | 6,120         |   | —   |                                                                                                       | 172               |   | 5,948        |
|                          |                      |                    |   |               |   |                | $                                                                                                          | 121,625           | $ | 130        | $ | 1,918        | $ | 119,837        |

|                                       |   |               |   |               |   |   | March      31, 2008         |
|--------------------------------------------|--------|--------------------|--------|--------------------|--------|--------|-----------------------------|
|                                       |   |               |   |               |   |   |                        | Amortized      cost |   | Fair      value |
|                                       |   |               |   |               |   |   | (Dollars      in thousands) |
|                                       |   |               |   |               |
| Due      within one year                   | $      | 7,382         | $      | 7,162         |
| Due      after one year through five years |   | 12,783        |   | 13,058        |
| Due      after five years through 10 years |   | 43,961        |   | 44,319        |
| Due      after ten years                   |   | 81,887        |   | 81,949        |
|                                       |   |               |   |               |   |   | $                           | 146,013        | $ | 146,488        |

----

|                                   |                           |                |               |                |                |              |            | March      31,              |   | December      31,     |
|----------------------------------------|--------------------------------|---------------------|--------------------|---------------------|---------------------|-------------------|-----------------|-----------------------------|--------|-----------------------|
|                                   |                           |                |               |                |                |              |            | 2008                        |   | 2007                  |
|                                   |                           |                |               |                |                |              |            | (Dollars      in thousands) |
| One-to-four      family residential    | $                              | 457,064        | $                  | 424,863        |
| Multifamily      residential           |                           | 78,624         |               | 76,039         |
| Commercial      real estate            |                           | 209,616        |               | 204,798        |
| Construction      and land development |                           | 278,177        |               | 288,378        |
| Home      equity                       |                           |                |               | 8,276          |                | 6,368        |
| Savings      account loans             |                           | 116            |               | 127            |
| Other      loans                       |                           |                |               |                | 109            |              | 177        |
|                                   |                           |                |               |                |                |              | $               | 1,031,982              | $      | 1,000,750        |
|                                   |                           |                |               |                |                |              |            |                        |   |
| Less:                                  |                           |                |               |                |                |              |            |                        |   |
|                                   | Loans      in process          |                | 97,479        |                | 108,939        |
|                                   | Deferred      loan fees        |                | 2,939         |                | 3,176          |
|                                   | Allowance      for loan losses |                | 7,971         |                | 7,971          |
|                                   |                           |                |               |                |                |              | $               | 923,593                | $      | 880,664          |

|                         | March      31,              |                                                                                                    | March      31, |
|------------------------------|-----------------------------|---------------------------------------------------------------------------------------------------------|----------------|
|                         | 2008                        |                                                                                                    | 2007           |
|                         | (Dollars      in thousands) |
| Beginning      balance       | $                           |          7,971                                             |           | $ |          1,971 |
| Provision      for loan loss |                        |                  - |           |   |             600 |
| Charge-offs                  |                        |                  - |           |   |                  - |
|                         | $                           |          7,971                                             |           |  $ |          2,571 |

----

|                                                   | March      31,              |                                                                                                    | December      31, |
|--------------------------------------------------------|-----------------------------|---------------------------------------------------------------------------------------------------------|-------------------|
|                                                   | 2008                        |                                                                                                    | 2007              |
|                                                   | (Dollars      in thousands) |
| Total      restructured and impaired loans             |  $                     |        29,867                                                        |              |  $ |        30,693 |
| Undisbursed      portion                               |  $                     |          6,436                                             |              |  $ |          7,212 |
| Amount      of the allowance for loan losses allocated |  $                     |          4,500                                             |              |  $ |          4,500 |
| Interest      income recognized during impairment      |  $                     |                  - |              |  $ |                  - |
| Cash-basis      interest income recognized             |  $                     |                  - |              |  $ |                  - |

|                                                | March      31,              |                                                        | December      31, |
|-----------------------------------------------------|-----------------------------|-------------------------------------------------------------|-------------------|
|                                                | 2008                        |                                                        | 2007              |
|                                                | (Dollars      in thousands) |
| Loans      past due over 90 days and still accruing | $                           |          1,367 |              | $ |          1,562 |
| Nonaccrual      loans                               | $                           |        29,867            |              | $ |        30,693 |

|                                            |   |                                      |   |   |                                                                                                                              |   | Three      Months Ended |
|-------------------------------------------------|--------|-------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|
|                                            |   |                                      |   |   |                                                                                                                              |   | March      31, 2008     |
| Net      income                                 |   |                                      |   | $      |                     4,472,509 |
| Weighted      average common shares outstanding |   |  21,188,368                          |
|                                            |   | Basic      and diluted earnings per share | $      | 0.21   |

----

| ·   | Level      1 – Quoted prices for identical instruments in active    markets. |
|--------------------|------------------------------------------------------------------------------------|

| ·   | Level      2 – Quoted prices for similar instruments in active markets; quoted prices      for identical or similar instruments in markets that are not active; and      model-derived valuations whose inputs are  observable. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level      3 – Instruments whose significant value drivers are      unobservable. |
|--------------------|-----------------------------------------------------------------------------------------|

|                                                                                                              | Fair      Value Measurements at March 31, 2008       |   |
|-------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|--------|
|                                                                                                              |                                                 |   |   |   | Quoted      Prices in |   |   | Significant |   |   |   |   |
|                                                                                                              |                                                 |   |   |   | Active      Markets |   |   | Other |   |   | Significant |   |
|                                                                                                              | Fair      Value                                      |   |   | for      Identical |   |   | Observable |   |   | Unobservable |   |
|                                                                                                              | Measurements                                         |   |   | Assets      (Level 1) |   |   | Inputs      (Level 2) |   |   | Inputs      (Level 3) |   |
|                                                                                                              |           (Dollars in thousands) |   |
| Available      for sale investments                                                                               |                                                 | $      | 146,488 |   |   | $ | 5,955 |   |   | $ | 140,533 |   |   | $ | - |   |
| Mortgage      servicing rights (included in Prepaid                                                               |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     expenses      and other assets)                                                           |                                                 |   | 1,041 |   |   |   | - |   |   |   | - |   |   |   | 1,041 |   |
|                   Total |                                                 | $      | 147,529 |   |   | $ | 5,955 |   |   | $ | 140,533 |   |   | $ | 1,041 |   |

|                                                          | Fair      Value Measurements at March 31, 2008       |   |
|---------------------------------------------------------------|------------------------------------------------------|--------|
|                                                          |                                                 |   |   |   | Quoted      Prices in |   |   | Significant |   |   |   |   |
|                                                          |                                                 |   |   |   | Active      Markets |   |   | Other |   |   | Significant |   |
|                                                          | Fair      Value                                      |   |   | for      Identical |   |   | Observable |   |   | Unobservable |   |
|                                                          | Measurements                                         |   |   | Assets      (Level 1) |   |   | Inputs      (Level 2) |   |   | Inputs      (Level 3) |   |
|                                                          |           (Dollars in thousands) |   |
| Impaired      loans including undisbursed but committed funds |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| (included      in loans receivable, net)                      |                                                 | $      | 25,367 |   |   | $ | - |   |   | $ | - |   |   | $ | 25,367 |   |
| Goodwill                                                      |                                                 |   | 14,206 |   |   |   | - |   |   |   | - |   |   |   | 14,206 |   |
|                                                          |                                                 | $      | 39,573 |   |   | $ | - |   |   | $ | - |   |   | $ | 39,573 |   |

----

----

----

----

|                                      |                        |                                                                                                                                                                                                    |   |                   | Increase/(Decrease)                                                                                                                                                                                           |                |                                                                                                                                                          |   |
|-------------------------------------------|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                      | Balance      at             |                                                                                                                                                                                                    |   | from                   |                                                                                                                                                                                                          | Percentage          |                                                                                                                                                          |
|                                      | March      31, 2008         |                                                                                                                                                                                                    |   | December      31, 2007 |                                                                                                                                                                                                          | Increase/(Decrease) |
|                                      | (Dollars      in thousands) |                                                                                                                                                                                                    |   |                   |
|                                      |                        |                                                                                                                                                                                                    |   |                   |                                                                                                                                                                                                          |                |                                                                                                                                                          |   |
| Cash      on hand and in banks            | $                           |                           6,718                                       |   | $                      |                           3,043                                             |                |                     82.80                                 | %      |
| Interest-bearing      deposits            |                        |                         72,434                                                  |   |                   |                         71,647                                                        |                |                9,103.81                                                            |   |
| Federal      Funds sold                   |                        |                           6,055                                       |   |                   |                         (1,060)                                                       |                |                   (14.90)                                           |   |
| Investments      available for sale       |                        |                       146,488                                                             |   |                   |                         26,651                                                        |                |                     22.24                                 |   |
| Investments      held to maturity         |                        |                                  - |   |                   |                       (80,410)                                                                  |                |                 (100.00)                                                      |   |
| Loans      receivable, net                |                        |                       923,593                                                             |   |                   |                         42,929                                                        |                |                       4.87                      |   |
| Premises      and equipment, net          |                        |                         13,156                                                  |   |                   |                            (183)                                       |                |                     (1.37)                                |   |
| Federal      Home Loan Bank               |                        |                                                                                                                                                                                                    |   |                   |                                                                                                                                                                                                          |                |                                                                                                                                                          |   |
|    stock,      at cost     |                        |                           4,850                                       |   |                   |                              179                             |                |                       3.83                      |   |
| Accrued      interest receivable          |                        |                           4,915                                       |   |                   |                            (279)                                       |                |                     (5.37)                                |   |
| Deferred      tax assets, net             |                        |                           6,146                                       |   |                   |                            (947)                                       |                |                   (13.35)                                           |   |
| Goodwill                                  |                        |                         14,206                                                  |   |                   |                                   - |                |                           - |   |
| Prepaid      expenses and other assets    |                        |                           4,397                                       |   |                   |                              500                             |                |                     12.83                                 |   |
|     Total      assets | $                           |                    1,202,958                                                                             |   | $                      |                         62,070                                                        |                |                       5.44                      | %      |

----

|                                         | Three      Months Ended March 31, |
|----------------------------------------------|-----------------------------------|
|                                         | 2008                              |   | 2007 |   | Increase/ |
|                                         |                              |   |   |   |   |   |   |   |   |   |   |   | (Decrease)      in |
|                                         |                              |   |   |   |   |   |   |   |   |   |   |   | Interest      and |
|                                         |                              | Average |   |   |   |   |   | Average |   |   |   |   | Dividend |
|                                         |                              | Balance |   | Yield |   |   |   | Balance |   | Yield |   |   | Income |
|                                         |                              | (Dollars      in thousands)           |
|                                         |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      receivable, net                   | $                                 |      900,245 |   |           6.70 | % |   | $ |     724,571 |   |           7.01 | % |   | $ |              2,370 |
| Investments      available for sale          |                              |      152,294 |   |           4.34 |   |   |   |     144,002 |   |           4.46 |   |   |   |                   49 |
| Investments      held to maturity            |                              |                  - |   |               - |   |   |   |       86,717 |   |           4.41 |   |   |   |               (955) |
| Federal      funds sold and interest-bearing |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    deposits                   |                              |        70,965 |   |           3.02 |   |   |   |       14,667 |   |           5.75 |   |   |   |                 325 |
| Federal      Home Loan Bank stock            |                              |          4,834 |   |           0.91 |   |   |   |         4,671 |   |           0.43 |   |   |   |                     6 |
| Total      interest-earning assets           | $                                 |   1,128,338 |   |           6.12 | % |   | $ |     974,628 |   |           6.35 | % |   | $ |              1,795 |

----

|                                          | Three      Months Ended March 31, |
|-----------------------------------------------|-----------------------------------|
|                                          | 2008                              |   | 2007 |   |   | Increase      / |
|                                          |                              |   |   |   |   |   |   |   |   |   |   |   |   | (Decrease)      in |
|                                          | Average                           |   |   |   |   | Average |   |   |   |   |   | Interest |
|                                          | Balance                           |   | Cost |   |   | Balance |   | Cost |   |   |   | Expense |
|                                          |                              | (Dollars      in thousands) |
|                                          |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW      accounts                             | $                                 |      11,723 |   |          0.68 | % |   | $ |      14,322 |   |          0.45 | % |   | $ |                     4 |
| Statement      savings accounts               |                              |      11,248 |   |          1.74 |   |   |   |      14,009 |   |          1.74 |   |   |   |                 (12) |
| Money      market accounts                    |                              |    145,620 |   |          2.29 |   |   |   |    202,297 |   |          4.41 |   |   |   |            (1,396) |
| Certificates      of deposit                  |                              |    571,980 |   |          5.02 |   |   |   |    524,226 |   |          4.89 |   |   |   |                 775 |
| Advances      from the Federal Home Loan Bank |                              |    108,923 |   |          3.78 |   |   |   |    152,231 |   |          5.43 |   |   |   |            (1,037) |
| Total      interest-bearing liabilities       | $                                 |    849,494 |   |          4.29 | % |   | $ |    907,085 |   |          4.75 | % |   | $ |            (1,666) |

----

|                                                                | At      or For the Three Months |
|---------------------------------------------------------------------|---------------------------------|
|                                                                | Ended      March 31,            |
|                                                                | 2008                            |   | 2007 |
|                                                                | (Dollars      in thousands)     |
|                                                                |                            |   |   |   |   |   |   |
| Provision      for loan losses                                      | $                               |                   - |   |   | $ |           600 |   |
| Net      charge-offs                                                |                            |                   - |   |   |   |                - |   |
| Allowances      for loan losses                                     | $                               |           7,971 |   |   | $ |        2,571 |   |
| Allowance      for losses as a percent of total loans               |                            |   |   |   |   |   |   |
|    outstanding      at the end of the period         |                            |             0.77 | % |   |   |          0.32 | % |
| Allowance      for loan losses as a percent of                      |                            |   |   |   |   |   |   |
|    nonperforming      loans at the end of the period |                            |           25.52 | % |   |   |      914.95 | % |
| Total      nonaccrual and 90 days or more past due loans            | $                               |         31,235 |   |   | $ |           281 |   |
| Nonaccrual      and 90 days or more past due loans as a             |                            |   |   |   |   |   |   |
|    percent      of total loans                       |                            |             3.03 | % |   |   |          0.03 | % |
| Total      loans receivable                                         | $                               |    1,031,982 |   |   | $ |    803,283 |   |
| Total      loans originated                                         | $                               |         66,061 |   |   | $ |      86,150 |   |

|                                  | Three      Months           | Increase/(Decrease)  |                                                    |                |   |
|---------------------------------------|-----------------------------|---------------------------|---------------------------------------------------------|---------------------|--------|
|                                  | Ended                       | from                 | Percentage                                              |
|                                  | March      31, 2008         | March      31, 2007       |                                                    | Increase/(Decrease) |
|                                  | (Dollars      in thousands) |
|                                  |                        |                      |                                                    |                |   |   |   |   |   |   |   |   |
| Service      fees on deposit accounts |                        | $                         |         17      |                |   | $ |          2 |   |   |   |       13.33 | % |
| Loan      service fees                |                        |                      |          2 |                |   |   |       (58) |   |   |   |      (96.67) |   |
| Gain      on sale of investments      |                        |                      |    1,373                                 |                |   |   |    1,373 |   |   |   |     100.00 |   |
| Mortgage      servicing rights, net   |                        |                      |       (58)                |                |   |   |         25 |   |   |   |       30.12 |   |
| Other                                 |                        |                      |         29      |                |   |   |         (9) |   |   |   |      (23.68) |   |
| Total      noninterest income         |                        | $                         |    1,363                                 |                |   | $ |    1,333 |   |   |   |   4,443.33 | % |

----

|                                      | Three      Months           |                                                     | Increase/(Decrease) |   |                                                                            |   |   |
|-------------------------------------------|-----------------------------|----------------------------------------------------------|---------------------|--------|---------------------------------------------------------------------------------|--------|--------|
|                                      | Ended                       |                                                     | from                |   | Percentage                                                                      |
|                                      | March      31, 2008         |                                                     | March      31, 2007 |   | Increase/(Decrease)                                                             |
|                                      | (Dollars      in thousands) |
|                                      |                        |                                                     |                |   |                                                                            |   |   |   |   |   |
| Compensation      and benefits            | $                           |     1,761                            |                | $      |          789                       |   |   |   |        81.17 | % |
| Occupancy      and equipment              |                        |        294            |                |   |            46            |   |   |   |        18.55 |   |
| Data      processing                      |                        |        113            |                |   |          (24)                      |   |   |   |      (17.52) |   |
| Professional      fees                    |                        |        295            |                |   |          166                       |   |   |   |      128.68 |   |
| Marketing                                 |                        |          46 |                |   |            (6)           |   |   |   |      (11.54) |   |
| Office      supplies and postage          |                        |          33 |                |   |          (18)                      |   |   |   |      (35.29) |   |
| Regulatory      fees and deposit          |                        |                                                     |                |   |                                                                            |   |   |   |   |   |
|    insurance      premiums |                        |          39 |                |   |              1 |   |   |   |          2.63 |   |
| Bank      and ATM charges                 |                        |          45 |                |   |              3 |   |   |   |          7.14 |   |
| Other                                     |                        |        260            |                |   |          105                       |   |   |   |        67.74 |   |
| Total      noninterest expense            | $                           |     2,886                            |                | $      |       1,062                                       |   |   |   |        58.22 | % |

----

----

|                                                             |                                                                   |                                                        |          | Amount      of Commitment Expiration - Per Period |                                                                                              |    |   |
|------------------------------------------------------------------|------------------------------------------------------------------------|-------------------------------------------------------------|---------------|---------------------------------------------------|---------------------------------------------------------------------------------------------------|---------|--------|
|                                                             |                                                                   |                                                        |          |                                              |                                                                                              |    | After  |   | After |   |   |   |
|                                                             |                                                                   |                                                        |          |                                              |                                                                                              |    | One    |   | Three |   |   |   |
|                                                             | Total                                                                  |                                                        |          |                                              |                                                                                              | Through |   | Through |   | After |
|                                                             | Amounts                                                                |                                                        | Through       |                                              | Three                                                                                             |    | Five   |   | Five |
|                                                             | Committed                                                              |                                                        | One      Year |                                              | Years                                                                                             |    | Years  |   | Years |
|                                                             |              (Dollars in thousands) |
|                                                             |                                                                   |                                                        |          |                                              |                                                                                              |    |   |   |   |   |   |   |   |   |
| Commitments      to originate loans                              | $                                                                      |        12,604            |          | $                                                 |        12,604                                                  |    | $      |                 - |   | $ |                 - |   | $ |                 - |
| Unused      portion of lines of credit                           |                                                                   |          3,734 |          |                                              |                 - |    |   |                 - |   |   |                 - |   |   |          3,734 |
| Undisbursed      portion of construction                         |                                                                   |                                                        |          |                                              |                                                                                              |    |   |   |   |   |   |   |   |   |
|     loans      in process                    |                                                                   |        97,479            |          |                                              |        74,335                                                  |    |   |        15,512 |   |   |          7,232 |   |   |             400 |
|        Total      commitments | $                                                                      |      113,817                       |          | $                                                 |        86,939                                                  |    | $      |        15,512 |   | $ |          7,232 |   | $ |          4,134 |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                         |    |              |                           |                                                                                  |   |        March 31, 2008                                                |               |   |                                            |   |               |                                                                      |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|-------------------|--------------------------------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------------------|--------|-------------------------------------------------|--------|--------------------|---------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                         |    |              |                           |                                                                                  |   |                                                                      |               |   | Net      Portfolio as % of                      |   |               |                                                                      |   |
| Basis      Point                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Net      Portfolio Value (1) |    |              | Portfolio      Value of Assets |                                                                                  |   | Market      Value                                                         |
| Change      in Rates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | Amount                       |    | $      Change (2) |                           | %      Change                                                                         |   |                                                                      | NPV      Ratio (3) |   | %      Change (4)                               |   | of      Assets (5) |
|                                                                                       (Dollars in thousands) |   |                         |    |              |
| 300                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                            | 251,715 |              | $                              |    (55,662)                                                            |   |      (18.11)                                     | %                  |   |        22.55 | %      |               |        (4.62)                          | %      |   | $      | 1,116,148 |
| 200                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                            | 269,066 |              | $                              |    (38,311)                                                            |   |      (12.46)                                     |               |   |        23.52 |   |               |        (3.18)                          |   |   | $      | 1,144,210 |
| 100                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                            | 287,933 |              | $                              |    (19,444)                                                            |   |        (6.33)                          |               |   |        24.52 |   |               |        (1.61)                          |   |   | $      | 1,174,090 |
| 0                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                            | 307,377 |              | $                              |               - |   |             - |               |   |        25.51 |   |               |             - |   |   | $      | 1,204,880 |
| (100)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                            | 320,956 |              | $                              |      13,579                                                  |   |          4.42                |               |   |        26.06 |   |               |          1.13                |   |   | $      | 1,231,540 |
| (200)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                            | 330,517 |              | $                              |      23,140                                                  |   |          7.53                |               |   |        26.35 |   |               |          1.92                |   |   | $      | 1,254,117 |
| (300)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                            | 339,515 |              | $                              |      32,138                                                  |   |        10.46                           |               |   |        26.70 |   |               |          2.67                |   |   | $      | 1,271,724 |

| (1)   | The      net portfolio value is calculated based upon the present value of the      discounted cash flows from assets and liabilities. The difference between      the present value of assets and liabilities is the net portfolio value and      represents the market value of equity for the given interest rate      scenario. Net portfolio value is useful for determining, on a market value      basis, how much equity changes in response to various interest rate      scenarios. Large changes in net portfolio value reflect increased interest      rate sensitivity and generally more volatile earnings    streams. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Represents      the increase (decrease) in the estimated net portfolio value at the      indicated change in interest rates compared to the net portfolio value      assuming no change in interestrates. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Calculated      as the net portfolio value divided by the market value of assets (“net      portfolio value ratio”). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Calculated      as the increase (decrease) in the net portfolio value ratio assuming the      indicated change in interest rates over the estimated portfolio value of      assets assuming no change in interestrates. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Calculated      based on the present value of the discounted cash flows from assets. The      market value of assets represents the value of assets under the various      interest rate scenarios and reflects the sensitivity of those assets to      interest rate changes. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| 3.1         |           Articles of Incorporation of First Financial Northwest, Inc.      (1) |
|-----------------------|-----------------------------------------------------------------------------------------------------|

| 3.2         |           Bylaws of First Financial Northwest, Inc.(1) |
|-----------------------|----------------------------------------------------------------------------|

| 4       |           Form of stock certificate of First Financial Northwest, Inc.  (1)               |
|---------------------------------------|---------------------------------------------------------------------------------------------------------------|
| 10.1                        |           Form of Employment Agreement for President and Chief Executive Officer      (1) |

| 10.2   |           Form of Change in Control Severance Agreement for Executive Officers      (1) |
|------------------|-------------------------------------------------------------------------------------------------------------|

| 10.3   |           Form of First Savings Bank Northwest Employee Severance Compensation Plan      (1) |
|------------------|------------------------------------------------------------------------------------------------------------------|

| 10.4   |           Form of Supplemental Executive Retirement Agreement entered into by First      Savings Bank with Victor Karpiak, Harry A. Blencoe and Robert H. Gagnier      (1) |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5   |           Form of Financial Institutions Retirement Fund  (1) |
|------------------|-----------------------------------------------------------------------------------|

| 10.6                   |           Form of 401(k) Retirement Plan (2)                                                              |
|----------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
| 14           |           Code of Business Conduct and Ethics                                                             |
| 21           |           Subsidiaries of the Registrant                                                                  |
| 31.1                        |           Certification of Chief Executive Officer Pursuant to Section 302 of the      Sarbanes-Oxley Act |
| 31.2                   |           Certification of Chief Financial Officer Pursuant to Section 302 of the      Sarbanes-Oxley Act |
| 32           |           Certification Pursuant to Section 906 of the Sarbanes-Oxley  Act                                |

----

----

| 31.1 | Certification      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley      Act                                                |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.2 | Certification      of Chief Financial Officer and Principal Financial and Accounting Officer      Pursuant to Section 302 of the Sarbanes-Oxley Act |
| 32   | Certification      Pursuant to Section 906 of the Sarbanes-Oxley  Act                                                                               |

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EXHIBIT 31.1

| 1. | I      have reviewed this Quarterly Report on Form 10-Q of First Financial      Northwest, Inc.; |
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| 2. | Based      on my knowledge, this report does not contain any untrue statement of a      material fact or omit to state a material fact necessary to make the      statements made, in light of the circumstances under which such statements      were made, not misleading with respect to the period covered by this      report; |
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| 3. | Based      on my knowledge, the financial statements, and other financial information      included in this report, fairly present in all material respects the      financial condition, results of operations and cash flows of the      registrant as of, and for, the periods presented in this      report; |
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| 4. | The      registrant’s other certifying officer(s) and I are responsible for      establishing and maintaining disclosure controls and procedures (as      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal      control over financial reporting (as defined in Exchange Act Rules      13a-15(f) and 15d-15(f)) for the registrant and  have: |
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| (a)   | Designed      such disclosure controls and procedures, or caused such disclosure      controls and procedures to be designed under our supervision, to ensure      that material information relating to the registrant, including its      consolidated subsidiaries, is made known to us by others within those      entities, particularly during the period in which this quarterly report is      being prepared; |
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| (b)   | Designed      such internal control over financial reporting, or caused such internal      control over financial reporting to be designed under our supervision, 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; |
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| (c)   | Evaluated      the effectiveness of the registrant’s disclosure controls and procedures      and presented in this report our conclusions about the effectiveness of      the disclosure controls and procedures, as of the end of the period      covered by this report based on such evaluation;  and |
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| (d)   | Disclosed      in this report any change in the registrant’s internal control over      financial reporting that occurred during the registrant’s most recent      fiscal quarter (the registrant’s fiscal fourth quarter in the case of an      annual report) that has materially affected, or is reasonably likely to      materially affect, the registrant’s internal control over financial      reporting; and |
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| 5. | The      registrant’s other certifying officer(s) and I have disclosed, based on      our most recent evaluation of internal control over financial reporting,      to the registrant’s auditors and the audit committee of registrant’s board      of directors (or persons performing the equivalent    functions): |
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| (a)   | All      significant deficiencies and material weakness in the design or operation      of internal control over financial reporting which are reasonably likely      to adversely affect the registrant’s ability to record, process, summarize      and report financial data information;and |
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| (b)   | Any      fraud, whether or not material, that involves management or other      employees who have a significant role in the registrant’s internal control      over financial reporting. |
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| 1. | I      have reviewed this Quarterly Report on Form 10-Q of First Financial      Northwest, Inc.; |
|----|--------------------------------------------------------------------------------------------------|

| 2. | Based      on my knowledge, this report does not contain any untrue statement of a      material fact or omit to state a material fact necessary to make the      statements made, in light of the circumstances under which such statements      were made, not misleading with respect to the period covered by this      report; |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Based      on my knowledge, the financial statements, and other financial information      included in this report, fairly present in all material respects the      financial condition, results of operations and cash flows of the      registrant as of, and for, the periods presented in this      report; |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | The      registrant’s other certifying officer(s) and I are responsible for      establishing and maintaining disclosure controls and procedures (as      defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal      control over financial reporting (as defined in Exchange Act Rules      13a-15(f) and 15d-15(f)) for the registrant and  have: |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Designed      such disclosure controls and procedures, or caused such disclosure      controls and procedures to be designed under our supervision, to ensure      that material information relating to the registrant, including its      consolidated subsidiaries, is made known to us by others within those      entities, particularly during the period in which this quarterly report is      being prepared; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Designed      such internal control over financial reporting, or caused such internal      control over financial reporting to be designed under our supervision, 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; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Evaluated      the effectiveness of the registrant’s disclosure controls and procedures      and presented in this report our conclusions about the effectiveness of      the disclosure controls and procedures, as of the end of the period      covered by this report based on such evaluation;  and |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Disclosed      in this report any change in the registrant’s internal control over      financial reporting that occurred during the registrant’s most recent      fiscal quarter (the registrant’s fiscal fourth quarter in the case of an      annual report) that has materially affected, or is reasonably likely to      materially affect, the registrant’s internal control over financial      reporting; and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | The      registrant’s other certifying officer(s) and I have disclosed, based on      our most recent evaluation of internal control over financial reporting,      to the registrant’s auditors and the audit committee of registrant’s board      of directors (or persons performing the equivalent    functions): |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | All      significant deficiencies and material weakness in the design or operation      of internal control over financial reporting which are reasonably likely      to adversely affect the registrant’s ability to record, process, summarize      and report financial data information;and |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Any      fraud, whether or not material, that involves management or other      employees who have a significant role in the registrant’s internal control      over financial reporting. |
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| 1. | the      Report fully complies with the requirements of Section 13(a) or 15(d) of      the Securities Exchange Act of 1934, as amended;  and |
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| 2. | the      information contained in the Report fairly presents, in all material      respects, the financial condition and results of operations of the Company      as of the dates and for the periods presented in the financial statements      included in the Report. |
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|   | . |
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