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<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><font face="Arial"><b>UNITED STATES </b></font></p>

<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><font face="Arial"><b>SECURITIES AND EXCHANGE
COMMISSION</b></font></p>

<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><font face="Arial"><b>Washington, D. C. 20549</b></font></p>
<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>



<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><font face="Arial"><b>FORM 8-K</b></font></p>
<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>



<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><font face="Arial">CURRENT REPORT</font></p>
<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>



<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><font face="Arial">Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934</font></p>
<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>



<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><font face="Arial">Date of Report (Date of
earliest event reported): April 30, 2007</font></p>
<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p class=Blockquote align=center style='margin:0in;margin-bottom:.0001pt;
text-align:center'><font face="Arial"><b><font size="4">Palmetto Bancshares, Inc.</font><br>
</b>(Exact name of registrant as
  specified in charter)</font></p>
<p class=Blockquote align=center style='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%">
 <tr>
  <td valign=top style='width:360px;padding:0in; ' align="center">
  <p class=MsoNormal style='margin-right:-17.05pt' align="left">
	<font face="Arial"><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></font></p>
  </td>
  <td valign=top style='width:261px;padding:0in; ' align="center">
  <p class=MsoNormal align=center style='text-align:center'><font face="Arial"><u>&nbsp;&nbsp;&nbsp;&nbsp;
  0-26016&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></p>
  </td>
  <td valign=top style='padding:0in; ' align="center">

  <p class=MsoNormal align=right><font face="Arial"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  74-2235055</u></font></p>

  </td>
 </tr>
 <tr>
  <td valign=top style='width:360px;padding:0in; ' align="center">
  <p class=MsoNormal align="left"><font face="Arial">State or
  other jurisdiction of <br>
	incorporation </font> </p>

  </td>
  <td valign=top style='width:261px;padding:0in; ' align="center">
  <p class=MsoNormal align=center style='text-align:center'><font face="Arial">Commission File Number</font></p>
  </td>
  <td valign=top style='padding:0in; ' align="center">
  <p class=MsoNormal align=right style='text-align:right'><font face="Arial">&nbsp;IRS Employer I.D. number</font></p>
  </td>
 </tr>
 <tr>
  <td valign=top style='width:360px;padding:0in; ' align="center">

  </td>
  <td valign=top style='width:261px;padding:0in; ' align="center">

  </td>
  <td valign=top style='padding:0in; ' align="center">

  &nbsp;</td>
 </tr>
 <tr>
  <td valign=top style='width:360px;padding:0in; ' align="center">

  </td>
  <td valign=top style='width:261px;padding:0in; ' align="center">

  </td>
  <td valign=top style='padding:0in; ' align="center">

  &nbsp;</td>
 </tr>
 <tr>
  <td colspan=2 valign=top style='width:621px;padding:0in; ' align="center">
  <p class=MsoNormal align="left"><font face="Arial"><u>301
  Hillcrest Drive, Laurens, South Carolina</u></font></p>
  </td>
  <td valign=top style='padding:0in; ' align="center">

  <p class=MsoNormal align=right style='text-align:right'><font face="Arial"><u>29360</u></font></p>

  </td>
 </tr>
 <tr>
  <td colspan=2 valign=top style='width:621px;padding:0in; ' align="center">
  <p class=MsoNormal align="left"><font face="Arial">Address
  of principal executive offices</font></p>
  </td>
  <td valign=top style='padding:0in; ' align="center">

  <p class=MsoNormal align=right style='text-align:right'><font face="Arial">Zip Code</font></p>

  </td>
 </tr>
 <tr>
  <td valign=top style='width:360px;padding:0in; ' align="center">

  </td>
  <td valign=top style='width:261px;padding:0in; ' align="center">

  </td>
  <td valign=top style='padding:0in; ' align="center">

  <font face="Arial">&nbsp;&nbsp; </font>

  </td>
 </tr>
 </table>



</div>



<p class=MsoNormal style='text-align:center;text-indent:.25in'>
<font face="Arial">&nbsp;<u>(864) 984-4551<br>
</u>Registrant's telephone number </font></p>
<p class=MsoNormal style='text-align:center;text-indent:.25in'>&nbsp;</p>
<p class=MsoNormal style='text-align:justify;text-indent:.25in'>
<font face="Arial" size="2">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):</font></p>



<p class=MsoNormal style='text-align:justify;text-indent:.25in'>
<font face="Arial" size="2">[&nbsp; ] Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)</font></p>



<p class=MsoNormal style='text-align:justify;text-indent:.25in'>
<font face="Arial" size="2">[&nbsp; ] Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></p>



<p class=MsoNormal style='text-align:justify;text-indent:.25in'>
<font face="Arial" size="2">[ ] Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></p>



<p class=MsoNormal style='text-align:justify;text-indent:.25in'>
<font face="Arial" size="2">[ ] Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></p>
<p class=MsoNormal style='text-align:justify;text-indent:.25in'>&nbsp;</p>



<hr color="#000080"><br clear=all
style='page-break-before:always'>


<p class=Blockquote style='margin:0in;margin-bottom:.0001pt'>
<font face="Arial" size="2"><b>Item 2.02.&nbsp; Results of Operations and Financial
Condition.</b></font></p>

<p class=Blockquote style='margin:0in;margin-bottom:.0001pt'>
<font face="Arial" size="2"><b>&nbsp;</b></font></p>

<p class=Blockquote style='margin-top:0in;margin-right:.25in;margin-bottom:
0in;margin-left:0in;margin-bottom:.0001pt'><font face="Arial" size="2">On
April 30, 2007, 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 months ended March
31, 2007. </font> </p>
<p class=Blockquote style='margin-top:0in;margin-right:.25in;margin-bottom:
0in;margin-left:0in;margin-bottom:.0001pt'>&nbsp;</p>



<p class=Blockquote style='margin:0in;margin-bottom:.0001pt'>
<font face="Arial" size="2">For more information regarding this matter, see the
shareholder earnings overview attached hereto as Exhibit 99.</font></p>
<p class=Blockquote style='margin:0in;margin-bottom:.0001pt'>&nbsp;</p>





<p class=Blockquote style='margin:0in;margin-bottom:.0001pt'>
<font face="Arial" size="2"><b>Item 9.01.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and Exhibits</b></font></p>

<p class=Blockquote style='margin:0in;margin-bottom:.0001pt'>
<font face="Arial" size="2"><b>&nbsp;</b></font></p>

<p class=Blockquote style='margin:0in;margin-bottom:.0001pt'>
<font face="Arial" size="2">(c) Exhibits</font></p>
<p class=Blockquote style='margin:0in;margin-bottom:.0001pt'>&nbsp;</p>



<p class=Blockquote style='margin:0in;margin-bottom:.0001pt;text-indent:13.5pt'>
<font face="Arial" size="2">99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shareholder report mailed April 30,
2007.</font></p>
<p class=Blockquote style='margin:0in;margin-bottom:.0001pt;text-indent:13.5pt'>&nbsp;</p>
<p class=Blockquote style='margin:0in;margin-bottom:.0001pt;text-indent:13.5pt'>&nbsp;</p>
<p class=Blockquote style='margin:0in;margin-bottom:.0001pt;text-indent:13.5pt'>&nbsp;</p>







<p class=MsoNormal align=center style='margin-right:-9.0pt;text-align:center'>
<b><font face="Arial">SIGNATURES</font></b></p>



<p class=MsoNormal style='margin-right:-9.0pt;text-align:justify'>
<font face="Arial" size="2">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.</font></p>







<p class=MsoNormal style='margin-right:-9.0pt;text-align:justify'>
<font face="Arial" size="2">PALMETTO BANCSHARES, INC.</font></p>





<p class=MsoNormal style='margin-right:-9.0pt;text-align:justify'>
<font face="Arial" size="2">By:&nbsp; /s/ L. Leon Patterson<br>
<u>&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<br>
</u>L. Leon Patterson<br>
Chairman and Chief Executive Officer</font></p>
<p class=MsoNormal style='margin-right:-9.0pt;text-align:justify'>
<font face="Arial" size="2">&nbsp;&nbsp; </font></p>







<p class=MsoNormal style='margin-right:-9.0pt;text-align:justify'>
<font face="Arial" size="2">/s/ Paul W. Stringer<u><br>
&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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>
</u>Paul W. Stringer<br>
President and Chief Operating
Officer<br>
(Chief Accounting Officer)</font></p>
<p class=MsoNormal style='margin-right:-9.0pt;text-align:justify'>&nbsp;</p>







<p class=MsoNormal style='margin-right:-9.0pt;text-align:justify'>
<font face="Arial" size="2">Date:&nbsp;&nbsp; May 11, 2007</font></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": "07843271"}, "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): April 30, 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
April 30, 2007, 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 months ended March
31, 2007.
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 April 30,
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
/s/ Paul W. Stringer
Paul W. Stringer
President and Chief Operating
Officer
(Chief Accounting Officer)
Date:   May 11, 2007