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


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<div style='page:Section1;'>

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text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><b>&nbsp;</b></p>

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text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><b>&nbsp;</b></p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

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text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><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:"Arial";margin-bottom:.0001pt;
text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><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:"Arial";margin-bottom:.0001pt;
text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><b>Washington, D. C. 20549</b></p>

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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:"Arial";margin-bottom:.0001pt;
text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><b>FORM 8-K</b></p>

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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:"Arial";margin-bottom:.0001pt;
text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>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:"Arial";margin-bottom:.0001pt;
text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>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:"Arial";margin-bottom:.0001pt;
text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Date of Report (Date of
earliest event reported): July 18, 2007</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="center">

<table class=MsoNormalTable border=0 cellpadding=0
 style='border-collapse:collapse' width="100%">
 <tr>
  <td valign=top style='padding:0in; ' width="28%">
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
  </td>
  <td colspan=5 valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
  </td>
  <td valign=top style='padding:0in; ' width="22%">
  <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; '>
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><b>Palmetto Bancshares, Inc.</b></p>
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>(Exact name of registrant as
  specified in charter)</p>
  </td>
 </tr>
 <tr>
  <td valign=top style='padding:0in; ' width="28%">
  <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; ' width="29%">
  <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; ' width="22%">
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td valign=top style='padding:0in; ' width="28%">
  <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; ' width="29%">
  <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; ' width="22%">
  <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-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-17.05pt; margin-left:0in; margin-top:0in'><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;</u></p>
  </td>
  <td valign=top style='padding:0in; ' width="3%">
  <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; ' width="29%">
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><u>&nbsp;&nbsp;&nbsp;&nbsp;
  0-26016&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
  </td>
  <td valign=top style='padding:0in; ' width="9%">
  <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-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  74-2235055</u></p>
  </td>
 </tr>
 <tr>
  <td colspan=3 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-left:0in; margin-right:0in; margin-top:0in'>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; ' width="29%">
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Commission File Number</p>
  </td>
  <td colspan=3 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>&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; ' width="3%">
  <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; ' width="29%">
  <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; ' width="9%">
  <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; ' width="3%">
  <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; ' width="29%">
  <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; ' width="9%">
  <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-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-left:0in; margin-right:0in; margin-top:0in'><u>301
  Hillcrest Drive, Laurens, South Carolina</u></p>
  </td>
  <td valign=top style='padding:0in; ' width="9%">
  <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-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'><u>29360</u></p>
  </td>
 </tr>
 <tr>
  <td colspan=4 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-left:0in; margin-right:0in; margin-top:0in'>Address
  of principal executive offices</p>
  </td>
  <td valign=top style='padding:0in; ' width="9%">
  <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-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>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; ' width="3%">
  <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; ' width="29%">
  <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; ' width="9%">
  <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; ' width="3%">
  <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; ' width="29%">
  <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; ' width="9%">
  <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=7 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-left:0in; margin-top:0in' align="center">
	<u>(864) 984-4551</u></p>
  </td>
 </tr>
 <tr>
  <td colspan=7 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>Registrant's telephone
  number </p>
  </td>
 </tr>
 <tr height=0>
  <td style='border:none' width="28%"></td>
  <td style='border:none' width="5%"></td>
  <td style='border:none' width="3%"></td>
  <td style='border:none' width="29%"></td>
  <td style='border:none' width="9%"></td>
  <td style='border:none' width="5%"></td>
  <td style='border:none' width="22%"></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-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:justify;text-indent:.25in; margin-left:0in; margin-right:0in; margin-top:0in'>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:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:justify;text-indent:.25in; margin-left:0in; margin-right:0in; margin-top:0in'>[&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:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-align:justify;text-indent:.25in; margin-left:0in; margin-right:0in; margin-top:0in'>[&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:10.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-indent:.25in; margin-left:0in; margin-right:0in; margin-top:0in'>[&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:10.0pt;font-family:"Times New Roman";text-indent:.25in'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";text-indent:.25in; margin-left:0in; margin-right:0in; margin-top:0in'>[&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:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>

<div style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-align:center'>

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

</div>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

<font face="Arial">

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<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";line-height:1.0pt'>&nbsp;</p>

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";text-indent:.25in'>&nbsp;</p>

<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Arial";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'><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:"Arial";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>

<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Arial";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>On July 18, 2007, Palmetto Bancshares, Inc. issued a
press release that disclosed the results of operations and financial condition
of the Company for the three and six month periods ended June 30, 2007.</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:"Arial";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>For more information regarding this matter, see the
press release 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:"Arial";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'><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:"Arial";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'><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:"Arial";margin-bottom:.0001pt; margin-left:0in; margin-right:0in; margin-top:0in'>(d) 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:"Arial";margin-bottom:.0001pt;text-indent:13.5pt; margin-left:0in; margin-right:0in; margin-top:0in'>99&nbsp;&nbsp; Press Release issued July 18, 2007.</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>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";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-size:10.0pt;font-family:"Arial";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-size:10.0pt;font-family:"Arial";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-size:10.0pt;font-family:"Arial";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-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>
<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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u></p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>&nbsp;L. Leon Patterson</p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>&nbsp;Chairman and Chief Executive
Officer</p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>&nbsp;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-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>&nbsp;<u>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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u></p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>&nbsp;Paul W. Stringer</p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>&nbsp;President and Chief Operating
Officer</p>

<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-right:-9.0pt;text-align:justify; margin-left:0in; margin-top:0in'>&nbsp;Chief Accounting Officer</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-size:10.0pt;font-family:"Arial";margin-left:0in; margin-right:0in; margin-top:0in'>Date: July
20, 2007</p>
<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;</p>
<p style='margin-bottom:.0001pt;font-size:10.0pt;font-family:"Arial";margin-left:0in; margin-right:0in; margin-top:0in'>&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": "07992241"}, "business-address": {"street1": "301 HILLCREST DR", "street2": "P O BOX 49", "city": "LAURENS", "state": "SC", "zip": "29360", "phone": "8649844551"}}
Palmetto Bank 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): July 18, 2007
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. below):
[  ]  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 July 18, 2007, Palmetto Bancshares, Inc. issued a
press release that disclosed the results of operations and financial condition
of the Company for the three and six month periods ended June 30, 2007.
For more information regarding this matter, see the
press release attached hereto as Exhibit 99.
Item 9.01.      Financial Statements and Exhibits
(d) Exhibits
99   Press Release issued July 18, 2007.
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
Palmetto Bancshares, Inc.
Paul
W. Stringer
Paul W. Stringer
President and Chief Operating
Officer
Chief Accounting Officer
Date: July
20, 2007