8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  April 5, 2013

First Financial Northwest, Inc.

(Exact name of registrant as specified in its charter)

Washington	001-3365	26-0610707
State or other jurisdiction of incorporation	Commission File Number	(I.R.S. Employer Identification No.)
201 Wells Avenue South, Renton, Washington		98057
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number (including area code) (425) 255-4400

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4 (c))

Item 8.01 Other Events.

On April 5, 2013, First Financial Northwest, Inc. (the “Company”), the parent company of First Savings Bank Northwest (“Bank”), announced the termination of the Bank’s Memorandum of Understanding (“Bank MOU”) dated March 27, 2012, by and between the Bank and the Federal Deposit Insurance Corporation (“FDIC”) and the Washington Department of Financial Institutions (“DFI”).  The Bank MOU was terminated as a result of the steps the Bank took in complying with the Bank MOU, including improving its interest rate risk, maintaining its minimum capital levels, maintaining an adequate level of allowance for loan and lease losses, improving its lending and collection policies, augmenting management and improving the overall condition of the Bank.

The Company also announced that the Board of Governors of the Federal Reserve System (“Federal Reserve”) had lifted two conditions of the Company’s Memorandum of Understanding (“Company MOU”) dated April 10, 2010, by and between the Company and its former regulator, the Office of Thrift Supervision (“OTS”), which is now enforced by the Federal Reserve as the successor to the OTS.  The termination of these conditions allows the Company to hire new executive officers or appoint new directors without prior notification to, and approval by, the Federal Reserve and to make severance or other golden parachute payments with prior notification to, and approval by, the Federal Reserve.  The termination of these conditions is effective immediately. The Company continues to be subject to the other restrictions included in the Company MOU, and is still required to obtain the approval of the Federal Reserve prior to the repurchase of its common stock and for the payment of any cash dividends.

Finally, the Company also announced that the FDIC, Washington DFI and the Federal Reserve had lifted the “troubled condition” status of the Bank and the Company.  The removal of this troubled condition status is effective immediately.

A copy of the Company’s press release announcing the termination of the Bank MOU, the lifting of certain conditions of the Company MOU and the termination of the Bank’s and the Company’s troubled condition status is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

(d)           Exhibits

The following exhibit is being furnished herewith and this list shall constitute the exhibit index:

99.1           Press Release of First Financial Northwest, Inc. dated April 5, 2013.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	FIRST FINANCIAL NORTHWEST, INC.
DATE: April 5, 2013	By: /s/Gary F. Kohlwes
	Gary F. Kohlwes
	Chairman of the Board

EX-99

	Exhibit 99.1
**For Immediate Release**	For more information, contact:
	Joseph W. Kiley III, President and Chief
	Executive Officer of First Savings Bank
	Northwest
	(425) 255-4400

First Financial Northwest, Inc. Announces

Lifting of Bank MOU and Other Regulatory Restrictions

Renton, Washington – April 5, 2013 – First Financial Northwest, Inc. (“Company”) (NASDAQ GS: FFNW), the holding company for First Savings Bank Northwest (“Bank”), today announced the termination of the Bank’s Memorandum of Understanding dated March 27, 2012, by and between the Bank and the Federal Deposit Insurance Corporation (“FDIC”) and the Washington Department of Financial Institutions (“DFI”).  The Company also announced that the Board of Governors of the Federal Reserve System (“Federal Reserve”) had lifted two conditions of the Company’s Memorandum of Understanding (“Company MOU”) dated April 10, 2010, by and between the Company and its former regulator, the Office of Thrift Supervision (“OTS”), which is now enforced by the Federal Reserve as the successor to the OTS.  The termination of these conditions is effective immediately.  The Company continues to be subject to the other restrictions included in the Company MOU, and is still required to obtain the approval of the Federal Reserve prior to the repurchase of its common stock and for the payment of any cash dividends.  The FDIC, DFI and Federal Reserve also have terminated the Bank’s and the Company’s troubled condition status effective immediately.

“We are pleased that our regulators have acknowledged the significant improvements we have accomplished,” said Joseph W. Kiley III, President and Chief Executive Officer of First Savings Bank Northwest.  “I would like to thank our employees for their hard work and commitment that has allowed us to attain these important goals.  With a solid capital foundation, we are well positioned for the future as we continue to execute on our strategies and priorities to strengthen our franchise.  Our next step is to continue to work to have the additional operating restrictions imposed by the Company MOU lifted.”

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. We are a part of the ABA NASDAQ Community Bank Index as well as the Russell 2000 and 3000 Indices. For additional information about us, please visit our website at www.fsbnw.com and click on the “Investor Relations” section.

Forward Looking Statements:

Statements in this news release regarding future events, performance or results are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”) and are made pursuant to the safe harbors of the PSLRA.  Actual results could be materially different from those expressed or implied by the forward-looking statements.  Factors that could cause results to differ include but are not limited to: general economic and banking business conditions, competitive conditions between banks and non-bank financial service providers, interest rate fluctuations, regulatory and accounting changes, the value of mortgage servicing rights, risks related to construction and development lending, commercial and small business banking and other risks.  Additional factors that could cause actual results to differ materially are disclosed in First Financial Northwest, Inc.'s recent filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2012, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.  

Forward-looking statements are accurate only as of the date released, and we do not undertake any responsibility to update or revise any forward-looking statements to reflect subsequent events or circumstances.