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<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'><b>UNITED STATES </b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'><b>SECURITIES AND EXCHANGE
COMMISSION</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'><b>Washington, D. C. 20549</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'><b>FORM 8-K</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>CURRENT REPORT</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>Date of Report (Date of
earliest event reported): October 31, 2008</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<div align="left">
	<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="100%">
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			<td width=213 valign=top style='width:159.75pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
			<td width=269 colspan=5 valign=top style='width:2.8in;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
			<td width=158 valign=top style='width:118.5pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td colspan=7 valign=top style='padding:0in; ' align="center">
			<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
			<b><font size="4">Palmetto Bancshares, Inc.</font></b></p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>(Exact name of registrant as
  specified in charter)</p></td>
		</tr>
		<tr>
			<td width=213 valign=top style='width:159.75pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width=46 colspan=2 valign=top style='width:34.25pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width=141 valign=top style='width:105.75pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width=82 colspan=2 valign=top style='width:61.6pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td width=158 valign=top style='width:118.5pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
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			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-17.05pt'>
			<u>South
  Carolina&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>
			<u>&nbsp;&nbsp;&nbsp;&nbsp;
  0-26016&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p></td>
			<td valign=top style='padding:0in; ' colspan="3" align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:right'>
			<u>&nbsp;
  74-2235055</u></p></td>
		</tr>
		<tr>
			<td colspan=3 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>State or
  other jurisdiction of incorporation </p>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>Commission File Number</p>
			</td>
			<td colspan=3 valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:right'>&nbsp;IRS Employer I.D. number</p>
			</td>
		</tr>
		<tr>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;
			</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td colspan=4 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>
			<u>301
  Hillcrest Drive, Laurens, South Carolina</u></p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:right'>
			<u>29360</u></p></td>
		</tr>
		<tr>
			<td colspan=4 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>Address
  of principal executive offices</p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:right'>Zip Code</p>
			</td>
		</tr>
		<tr>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";' align="center">&nbsp;<u>(864) 984-4551</u></p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td valign=top style='padding:0in; ' align="center">
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-15.25pt' align="center">
			Registrant's telephone number </p></td>
			<td valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
			<td colspan=2 valign=top style='padding:0in; '>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
			</td>
		</tr>
		<tr>
			<td width=640 colspan=7 valign=top style='width:479.85pt;padding:0in 0in 0in 0in'>
			<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
			</p></td>
		</tr>
		<tr height=0>
			<td width=213 style='border:none'></td>
			<td width=4 style='border:none'></td>
			<td width=41 style='border:none'></td>
			<td width=141 style='border:none'></td>
			<td width=78 style='border:none'></td>
			<td width=4 style='border:none'></td>
			<td width=158 style='border:none'></td>
		</tr>
	</table></div>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>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 (<i>see</i> General
Instruction A.2.):</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>[&nbsp; ] Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>[&nbsp; ] Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>[ ] Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>[ ] Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<hr color="#000080"><br clear=all
style='page-break-before:always'>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>
<b>Item 2.02.&nbsp; Results of Operations and Financial
Condition.</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>
<b>&nbsp;</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:.25in;margin-bottom:
0in;margin-left:0in;margin-bottom:.0001pt'>On
October 31, 2008, Palmetto Bancshares, Inc. mailed to shareholders its
quarterly shareholder earnings overview disclosing the results of operations
and financial condition of the Company as of and for the three and nine month
periods ended September 30, 2008. </p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>For more information regarding this matter, see the
shareholder earnings overview attached hereto as Exhibit 99.</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>
<b>Item 9.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and Exhibits</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>
<b>&nbsp;</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>(c) Exhibits</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;text-indent:13.5pt'>99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shareholder report mailed October
31, 2008</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p><hr color="#000080">
<br clear=all
style='page-break-before:always'>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:center; margin-left:0in; margin-top:0in'>SIGNATURES</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";text-align:justify; margin-left:0in; margin-top:0in'>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 thereunto duly authorized.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>PALMETTO BANCSHARES, INC.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>By:</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'><u>/s/
L. Leon
Patterson&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;L.
Leon Patterson</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;Chairman
and Chief Executive Officer</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;<u>/s/
Paul W.
Stringer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u></p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;Paul
W. Stringer</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;President
and Chief Operating Officer</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;Chief
Accounting Officer</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:justify;page-break-after:avoid'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>Date:&nbsp;&nbsp; November
6, 2008</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>

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{"company-data": {"conformed-name": "PALMETTO BANCSHARES INC", "cik": "0000706874", "assigned-sic": "6022", "irs-number": "742235055", "state-of-incorporation": "SC", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26016", "film-number": "081167077"}, "business-address": {"street1": "301 HILLCREST DR", "street2": "P O BOX 49", "city": "LAURENS", "state": "SC", "zip": "29360", "phone": "8649844551"}}
Prepared by E-Services - www.edgar2.com
UNITED STATES
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): October 31, 2008
Palmetto Bancshares, Inc.
(Exact name of registrant as
  specified in charter)
South
  Carolina
0-26016
74-2235055
State or
  other jurisdiction of incorporation
Commission File Number
IRS Employer I.D. number
301
  Hillcrest Drive, Laurens, South Carolina
29360
Address
  of principal executive offices
Zip Code
(864) 984-4551
Registrant's telephone number
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 (
see
General
Instruction A.2.):
[  ] 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 2.02.  Results of Operations and Financial
Condition.
On
October 31, 2008, Palmetto Bancshares, Inc. mailed to shareholders its
quarterly shareholder earnings overview disclosing the results of operations
and financial condition of the Company as of and for the three and nine month
periods ended September 30, 2008.
For more information regarding this matter, see the
shareholder earnings overview attached hereto as Exhibit 99.
Item 9.01.      Financial Statements and Exhibits
(c) Exhibits
99               Shareholder report mailed October
31, 2008
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 thereunto duly authorized.
PALMETTO BANCSHARES, INC.
By:
/s/
L. Leon
Patterson
L.
Leon Patterson
Chairman
and Chief Executive Officer
/s/
Paul W.
Stringer
Paul
W. Stringer
President
and Chief Operating Officer
Chief
Accounting Officer
Date:   November
6, 2008