The thing about being a successful contrarian is that you always look wrong. The market tells you you're wrong -- until one day you're right. The best value investors require the courage of their process. So it's with that preamble that my Special Situations portfolio is back to buy more shares of First Financial Northwest (NASDAQ:FFNW).

I bought shares just last month, and there's nothing new that I haven't said before, but that doesn't mean I shouldn't buy more if the price still looks good. So once again here's why I like the stock.

A cheap profitable bank below tangible book
There's so much to like about First Financial that I don't know where to begin. But let's start with profitability. The bank has been solidly profitable for the last three years. And while last year's numbers were inflated by a tax issue, the bank still improved its revenue even while decreasing noninterest expense.

Credit metrics continue to improve. Nonperforming assets as a percent of total assets dropped to 1.7% from 4.3% in 2012. And that's down from 11.8% in 2009. The latest figure is still too high but going in the right direction as the economy normalizes. The bank is based in Seattle, one of the strongest local economies.

The bank remains flush with cash. Average equity as a percent of average assets is 19.9%. Tier 1 capital is 27.2%.

Activist Joe Stilwell is seeking to get the bank sold to the highest bidder, and the new CEO recently updated his contract so that he would be paid three times his salary in the event of a buyout. So that's one more issue that should not be standing in the way of Stilwell achieving his end.

Stilwell has also gotten the bank to buy back a substantial number of shares over the past year. First Financial spent $28 million on buybacks over the past year, reducing share count by 13%.

And, yes, this bank trades at less than 90% of tangible book value.

Foolish bottom line
So that's why my Special Situations portfolio is continuing to add to an overweight position -- already nearly 8% of my holdings -- in First Financial, and later this week I'll be buying $500 of stock.

Interested in First Financial Northwest or have another stock to share? Check out my discussion board or follow me on Twitter, @TMFRoyal.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.