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<title>Palmetto 8-K</title>


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<div style='page:Section1;'>

<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";layout-grid-mode:both;margin:0in;margin-bottom:.0001pt;
text-align:center'><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";layout-grid-mode:both;margin:0in;margin-bottom:.0001pt;
text-align:center'><b>&nbsp;</b></p>

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

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

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

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;line-height:1.0pt'>&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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;margin:0in;margin-bottom:.0001pt;
text-align:center'>Date of Report (Date of
earliest event reported): January 11, 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";layout-grid-mode:both;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="775">
 <tr>
  <td colspan=5 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'><b>Palmetto Bancshares, Inc.</b></p>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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 width="30%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="36%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&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";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="21%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="36%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&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";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="21%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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 width="36%" valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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 width="6%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td colspan=2 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both; 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";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="36%" valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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-family:"Times New Roman";layout-grid-mode:both;text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;IRS Employer I.D. number</p>
  </td>
 </tr>
 <tr>
  <td valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="36%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="6%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&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";layout-grid-mode:both;'>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="36%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="6%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&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";layout-grid-mode:both;'>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td colspan=2 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both; margin-left:0in; margin-right:0in; margin-top:0in'><u>301
  Hillcrest Drive, Laurens, South Carolina</u></p>
  </td>
  <td width="6%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td colspan=2 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'><u>29360</u></p>
  </td>
 </tr>
 <tr>
  <td colspan=2 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both; margin-left:0in; margin-right:0in; margin-top:0in'>Address
  of principal executive offices</p>
  </td>
  <td width="6%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td colspan=2 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;text-align:right; margin-left:0in; margin-right:0in; margin-top:0in'>Zip Code</p>
  </td>
 </tr>
 <tr>
  <td valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="36%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="6%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&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";layout-grid-mode:both;'>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="36%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&nbsp;</p>
  </td>
  <td width="6%" valign=top style='padding:0in; '>
  <p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;'>&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";layout-grid-mode:both;'>&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td colspan=5 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;margin-right:-15.25pt; margin-left:0in; margin-top:0in' align="center">
	<u>(864) 984-4551</u></p>
  </td>
 </tr>
 <tr>
  <td colspan=5 valign=top style='padding:0in; '>
  <p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;text-align:center; margin-left:0in; margin-right:0in; margin-top:0in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Registrant's telephone
  number </p>
  </td>
 </tr>
 <tr height=0>
  <td width="30%" style='border:none'></td>
  <td width="36%" style='border:none'></td>
  <td width="6%" style='border:none'></td>
  <td width="5%" style='border:none'></td>
  <td width="21%" 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";layout-grid-mode:both;margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;text-align:justify;text-indent:.25in'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;text-align:justify;text-indent:.25in'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;text-align:justify;text-indent:.25in'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;text-indent:.25in'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;'>&nbsp;</p>

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

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


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

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

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

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

<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;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:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;margin:0in;margin-bottom:.0001pt'>On January 11, 2008, Palmetto Bancshares, Inc. issued
a press release that disclosed the results of operations and financial
condition of the Company for the three and twelve month periods ended December
31, 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";layout-grid-mode:both;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";layout-grid-mode:both;margin:0in;margin-bottom:.0001pt'>For more information regarding this matter, see the
press release attached hereto as Exhibit 99.1.</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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;margin:0in;margin-bottom:.0001pt'>(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";layout-grid-mode:both;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";layout-grid-mode:both;margin:0in;margin-bottom:.0001pt;text-indent:13.5pt'>99.1&nbsp;&nbsp; Press Release issued January 11, 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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;'>&nbsp;</p>

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

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style='page-break-before:always'>


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

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

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

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

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

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

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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'>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:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;text-align:justify;page-break-after:avoid'>&nbsp;</p>

<p style='margin-bottom:.0001pt;font-family:"Times New Roman";layout-grid-mode:both;text-align:justify;page-break-after:avoid; margin-left:0in; margin-right:0in; margin-top:0in'>Dated: January
14, 2008</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;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";layout-grid-mode:both;text-align:justify;page-break-after:avoid'>&nbsp;</p>

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<p style='margin:0in;margin-bottom:.0001pt;font-size:10.0pt;font-family:"Times New Roman";layout-grid-mode:both;line-height:1.0pt'>&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": "08529716"}, "business-address": {"street1": "301 HILLCREST DR", "street2": "P O BOX 49", "city": "LAURENS", "state": "SC", "zip": "29360", "phone": "8649844551"}}
Palmetto 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): January 11, 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. 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 January 11, 2008, Palmetto Bancshares, Inc. issued
a press release that disclosed the results of operations and financial
condition of the Company for the three and twelve month periods ended December
31, 2007.
For more information regarding this matter, see the
press release attached hereto as Exhibit 99.1.
Item 9.01.      Financial Statements and Exhibits
(d) Exhibits
99.1   Press Release issued January 11, 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/ Ralph M. Burns,
III
Ralph M. Burns, III
Executive Vice President
Dated: January
14, 2008