First Financial Northwest, Inc. and the Stilwell Group Announce Settlement of Litigation

First Financial Northwest, Inc. and the Stilwell Group Announce Settlement of
Litigation

RENTON, Wash., Dec. 20, 2012 (GLOBE NEWSWIRE) -- First Financial Northwest,
Inc. (the "Company") (Nasdaq:FFNW) and the Stilwell Group announced that they
have settled the litigation in which the Stilwell Group challenged the
counting of votes in a contested director election at the Company's 2012
Annual Meeting of Shareholders. In that election, the Stilwell Group's
candidate, Spencer L. Schneider, ran against the Company's Chairman, President
and Chief Executive Officer, Victor Karpiak. In accord with the election
results certified by an independent Inspector of Election, the Company
announced that Mr. Karpiak was the winner of the election, but the Stilwell
Group contested the result on the ground that proxies and votes submitted by
them had not been counted.

The settlement provides, among other things, that (i) Mr. Schneider will be
given a seat on the Company's Board after the Company and Mr. Schneider obtain
any required regulatory approvals, and will then be nominated by the Company
at the 2013 Annual Meeting of Shareholders for a full three-year term; (ii)
Mr. Karpiak will resign as Chairman of the Board immediately after Mr.
Schneider joins the Board, but Mr. Karpiak will remain a member of the Board
until September 1, 2013, whereupon he will resign from the Board; (iii) the
Company will reimburse a portion of the Stilwell Group's proxy solicitation
expenses in connection with the 2012 Annual Meeting; (iv) the Stilwell Group
will support the Board's nominees in the director election to be held at the
2013, 2014 and 2015 Annual Meetings of Shareholders; and (v) the Litigation
will be dismissed with mutual releases exchanged.

As announced on September 12, 2012, Mr. Karpiak previously entered into a
Transition Agreement to facilitate executive succession at First Savings Bank
Northwest, a wholly owned subsidiary of the Company.The Company believes that
Mr. Karpiak's agreement to resign as Chairman of the Board and to step down
from the Board before completing his term as a director is consistent with his
prior decision to reduce his obligations to the Bank, as set forth in the
Transition Agreement.

Both the Stilwell Group and the Company are pleased that the matter has been
resolved.Victor Karpiak, for the Company, states that "We are delighted that
we have found a solution to this costly election dispute that, we believe, is
in the best interests of our shareholders."Joseph Stilwell, for the Stilwell
Group, states that "we are very happy that our candidate will be seated on the
Board."

First Financial Northwest, Inc. is the parent company of First Savings Bank
Northwest, a Washington chartered stock savings bank headquartered in Renton,
Washington, serving the Puget Sound Region through its full-service banking
office.The Company is a part of the ABA NASDAQ Community Bank Index.For
additional information about the Company, please visit www.fsbnw.com and click
on the "Investor Relations" section.

The Stilwell Group is a New York-based money management firm which currently
owns approximately 9.41% of the Company's outstanding shares of common stock.

CONTACT: For more information, contact:
         For First Financial Northwest, Inc.:
         Victor Karpiak, President and Chief Executive Officer,
         (425) 255-4400
         For The Stilwell Group:
         Megan Parisi,
         (212) 269-1551
 
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