<html>

<head>
<!-- Document Prepared With EDGARSTAR Software-->
<!-- Copyright 2007 EDGARSTAR TRADEMARK-->
<!-- All rights reserved EDGAR2.com -->

<title>Palmetto Form 8-K</title>



</head>

<body lang=EN-US link=blue vlink=purple>

<div style='page:Section1;'>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'><b>&nbsp;</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'><b>&nbsp;</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>UNITED
STATES</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'><b>SECURITIES AND EXCHANGE
COMMISSION</b></p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>Washington,
D.C.&nbsp; 20549</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'><b>&nbsp;</b></p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>FORM
8-K</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'><b>&nbsp;</b></p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
<b>CURRENT
REPORT</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Pursuant
to Section 13 or 15(d) of</p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>the
Securities Exchange Act of 1934</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'><font style="font-size: 11.0pt">Date of Report (Date of earliest event reported):&nbsp; <u>October
23, 2007</u></font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>
<b><u>Palmetto
Bancshares, Inc.</u></b></p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>(Exact
name of registrant</p>

<p style='margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>as
specified in its charter)</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<table border="0" style="border-collapse: collapse" width="100%" id="table1">
	<tr>
		<td width="345" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom: 1px solid #000000" align="center">

<p style='margin-bottom:0;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line; margin-top:0'>South Carolina</p>
		</td>
		<td style="border-left-style: none; border-left-width: medium; border-bottom: 1px solid #000000" align="center">
		<p style="margin-top: 0; margin-bottom: 0">0-26016</td>
		<td align="center" style="border-bottom: 1px solid #000000">
		<p style="margin-top: 0; margin-bottom: 0">74-2235055</td>
	</tr>
	<tr>
		<td width="345" style="border-top-style: none; border-top-width: medium" align="center">

<p style='margin-bottom:0;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-top:0'>
(State or other</p></td>
		<td align="center">
		<p style="margin-top: 0; margin-bottom: 0">(Commission</td>
		<td align="center">
		<p style="margin-top: 0; margin-bottom: 0">(I.R.S.
Employer</td>
	</tr>
	<tr>
		<td width="345" align="center">

<p style='margin-bottom:0;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-top:0'>
jurisdiction of</p></td>
		<td align="center">
		<p style="margin-top: 0; margin-bottom: 0">File Number) </td>
		<td align="center">
		<p style="margin-top: 0; margin-bottom: 0">Identification No.)</td>
	</tr>
	<tr>
		<td width="345" align="center">

<p style='margin-bottom:0;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-top:0'>incorporation)</p>

		</td>
		<td align="center">
		<p style="margin-top: 0; margin-bottom: 0">&nbsp;</td>
		<td align="center">
		<p style="margin-top: 0; margin-bottom: 0">&nbsp;</td>
	</tr>
</table>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";layout-grid-mode:line;text-align:center'><u>301 Hillcrest Drive, Laurens, South Carolina 29360</u></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'><font style="font-size: 11.0pt">(Address of principal executive offices)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Zip Code)</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'><font style="font-size: 11.0pt">Registrant's telephone number, including area code:&nbsp; <u>(864)
984-4551</u></font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'><u><font style="font-size: 11.0pt">Not Applicable</font></u></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'><font style="font-size: 11.0pt">(Former name or former address, if changed since last
report.)</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;line-height:13.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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. below):</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;line-height:13.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;line-height:13.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font face="Wingdings">o</font>&nbsp;&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:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;line-height:13.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;line-height:13.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font face="Wingdings">o</font>&nbsp;&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:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;line-height:13.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-left:.5in;text-align:justify;text-indent:-.5in;
line-height:13.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font face="Wingdings">o</font>&nbsp;&nbsp; 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:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-left:.5in;text-align:justify;text-indent:-.5in;
line-height:13.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-left:.5in;text-align:justify;text-indent:-.5in;
line-height:13.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font face="Wingdings">o</font>&nbsp;&nbsp; Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'>&nbsp;</p>

<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

</div>

<br
clear=all style='page-break-before:always'>


<div style='page:Section2;'>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<h1 style='margin:0in;margin-bottom:.0001pt;page-break-after:avoid;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;font-weight:bold;text-align:center'><font style="font-size: 11.0pt">INFORMATION
TO BE INCLUDED IN THE REPORT</font></h1>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'><b>Item 5.05. Amendments to the Registrant&#146;s Code of
Ethics, or Waiver of a Provision of the Code of Ethics.&nbsp; </b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'><font style="font-size: 11.0pt">Attached
as Exhibit 99.1 and incorporated herein is the registrant&#146;s &#147;Code of Ethics for
Executive Management and Senior Financial Officers,&#148; as enacted by the registrant&#146;s
board of directors on October 23, 2007 (the &#147;Code of Ethics&#148;). The Code of
Ethics applies to the executive management and senior financial officers of the
registrant and its subsidiary Palmetto Bank (the &quot;Bank&quot;).&nbsp; The Code
of Ethics was enacted to address issues specific to executive management and
senior financial officers and to supplement the Company's existing code of
ethics, which applies more broadly to all of the directors, officers and
employees of the registrant and the Bank.&nbsp; The Code of Ethics is intended to
focus executive management and senior financial officers on areas of ethical
risk, provide guidance to help these officers recognize and deal with ethical
issues, provide mechanisms to report unethical conduct, and promote fair and accurate
disclosure of financial reporting.</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'><font style="font-size: 11.0pt">The
foregoing summary of the material features of the Code of Ethics is qualified
in its entirety by reference to the provisions of the Code of Ethics attached
as Exhibit 99.1. </font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'><b>Item 9.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and
Exhibits</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-top:5.0pt;margin-right:0in;margin-bottom:5.0pt;
margin-left:0in'><font style="font-size: 11.0pt">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-top:5.0pt;margin-right:0in;margin-bottom:5.0pt;
margin-left:0in'><b><font style="font-size: 11.0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font></b><u><font style="font-size: 11.0pt">Exhibit No.</font></u><font style="font-size: 11.0pt"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Exhibit</u></font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-top:5.0pt;margin-right:0in;margin-bottom:5.0pt;
margin-left:.5in'><font style="font-size: 11.0pt">99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Code of
Ethics for Executive Management and Senior Financial Officers</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;margin-top:5.0pt;margin-right:0in;margin-bottom:5.0pt;
margin-left:0in'><b>&nbsp;</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-autospace:none'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'>

&nbsp;</p>

<br clear=ALL>

<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<br
clear=all style='page-break-before:always'>


<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center;page-break-after:avoid'><b>SIGNATURES</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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.</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;page-break-after:avoid'>PALMETTO BANCSHARES, INC.</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";layout-grid-mode:line;margin-right:-9.0pt;text-align:justify'>By:</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";layout-grid-mode:line;margin-right:-9.0pt;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";layout-grid-mode:line;margin-right:-9.0pt;text-align:justify'>&nbsp;<u>/s/ Ralph M. Burns,
III&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:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";layout-grid-mode:line;margin-right:-9.0pt;text-align:justify'>&nbsp;Ralph M. Burns, III</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";layout-grid-mode:line;margin-right:-9.0pt;text-align:justify'>&nbsp;Executive Vice President</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";layout-grid-mode:line;margin-right:-9.0pt;text-align:justify'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:justify;page-break-after:avoid'>Dated: January 14, 2008</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'><font style="font-size: 11.0pt">&nbsp;</font></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'>

&nbsp;</p>

<br clear=ALL>

<div style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;text-align:center'>

<hr size=2 width="100%" noshade color=navy align=center>

</div>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"CG Times";layout-grid-mode:line;'>&nbsp;</p>

</div>

</body>

</html>
[{"type": "8-K", "sequence": "1", "filename": "espalmetto8k.htm", "secsgml_size_bytes": 22722}]
{"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": "08528264"}, "business-address": {"street1": "301 HILLCREST DR", "street2": "P O BOX 49", "city": "LAURENS", "state": "SC", "zip": "29360", "phone": "8649844551"}}
Palmetto Form 8-K
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
23, 2007
Palmetto
Bancshares, Inc.
(Exact
name of registrant
as
specified in its charter)
South Carolina
0-26016
74-2235055
(State or other
(Commission
(I.R.S.
Employer
jurisdiction of
File Number)
Identification No.)
incorporation)
301 Hillcrest Drive, Laurens, South Carolina 29360
(Address of principal executive offices)           
(Zip Code)
Registrant's telephone number, including area code:
(864)
984-4551
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 (
see
General
Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
INFORMATION
TO BE INCLUDED IN THE REPORT
Item 5.05. Amendments to the Registrant's Code of
Ethics, or Waiver of a Provision of the Code of Ethics.
Attached
as Exhibit 99.1 and incorporated herein is the registrant's "Code of Ethics for
Executive Management and Senior Financial Officers," as enacted by the registrant's
board of directors on October 23, 2007 (the "Code of Ethics"). The Code of
Ethics applies to the executive management and senior financial officers of the
registrant and its subsidiary Palmetto Bank (the "Bank").  The Code
of Ethics was enacted to address issues specific to executive management and
senior financial officers and to supplement the Company's existing code of
ethics, which applies more broadly to all of the directors, officers and
employees of the registrant and the Bank.  The Code of Ethics is intended to
focus executive management and senior financial officers on areas of ethical
risk, provide guidance to help these officers recognize and deal with ethical
issues, provide mechanisms to report unethical conduct, and promote fair and accurate
disclosure of financial reporting.
The
foregoing summary of the material features of the Code of Ethics is qualified
in its entirety by reference to the provisions of the Code of Ethics attached
as Exhibit 99.1.
Item 9.01.      Financial Statements and
Exhibits
(c)        Exhibits
Exhibit No.
Exhibit
99.1                  Code of
Ethics for Executive Management and Senior Financial Officers
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.
PALMETTO BANCSHARES, INC.
By:
/s/ Ralph M. Burns,
III
Ralph M. Burns, III
Executive Vice President
Dated: January 14, 2008