FMSB First Mutual Bancshares (MM)

First Mutual Bancshares, Inc. (Nasdaq: FMSB) announced today that George Brace has joined First Mutual Bank and been named Senior Vice President and Business Development Officer. Brace brings over forty years of banking experience in the Pacific Northwest and has strong ties to the East Side community. "George has been cultivating relationships with business owners in our market for decades," stated John Valaas, President and CEO. "His unparalleled experience, unique understanding of community banking, and history of serving businesses will be crucial as we continue to build our Business Banking Division. The relationships that George has cultivated throughout his distinguished career, primarily on the East Side, will help us generate new customers." Most recently, Brace served as the Community Banking President of Washington State for Wells Fargo Bank, where he also focused on integrating the business banking team from Pacific Northwest Bank. He was a founding officer at Pacific Northwest, and an Executive Vice President whose titles included Banking Group Manager, Commercial Banking Manager and Puget Sound Region Manager. Before that, he served as Vice President and East King County Manager at Old National Bank and spent nearly twenty years at Seattle-First National Bank. His past community involvement includes board memberships at the Bellevue Downtown Association, Bellevue Art Museum, Bellevue Schools Foundation, and Overlake Hospital. He has also served as Chairman of the Bellevue Chamber of Commerce. "After nearly a year with a big bank followed by a brief retirement, I am looking forward to getting back to my roots in community banking and joining the highly respected bankers on the First Mutual team," Brace said. "I have been working with businesses in this market for a long time and look forward to reconnecting with people I've worked with in the past. I look forward to making a contribution to the continued growth of First Mutual's Business Banking Division, bringing new relationships to the bank." In April, First Mutual reported its 54th consecutive quarter of year-over-year earnings growth, with first quarter diluted earnings per share rising 6% from the same period in 2005. First Mutual's consistent performance has garnered attention from a number of sources. Keefe, Bruyette & Woods named First Mutual to its Honor Roll in 2005 and 2004 for the company's 10-year earnings per share growth rate. In August 2005, U.S. Banker magazine ranked First Mutual #34 in the Top 100 Publicly Traded Mid-Tier Banks, which includes those with less than $10 billion in assets, based on its three-year return on equity. First Mutual Bancshares, Inc. is the parent company of First Mutual Bank, an independent, community-based bank that operates 12 full-service banking centers in the Puget Sound area and a sales finance office in Jacksonville, Florida. This press release contains forward-looking statements, including, among others, statements about anticipated growth in assets and liabilities, additional growth in the Business Banking Division, and credit quality. Although we believe that the expectations expressed in these forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our business, operations, and prospects. These forward-looking statements are subject to numerous uncertainties and risks, and actual results may differ materially from those expressed or implied in such forward-looking statements. Factors that could affect actual results include general interest rate and net interest changes and the fiscal and monetary policies of the government, success of new-hires, the ability to generate additional business, economic conditions in our market area and the nation as a whole, the impact of competitive products, services, and pricing; and our credit risk management. We disclaim any obligation to update or publicly announce future events or developments that might affect the forward-looking statements herein or to conform these statements to actual results or to announce changes in our expectations. There are other risks and uncertainties that could affect us which are discussed from time to time in our filings with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We are not responsible for updating any such forward-looking statements. www.firstmutual.com