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<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'><b>UNITED STATES </b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'><b>SECURITIES AND EXCHANGE
COMMISSION</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'><b>Washington, D. C. 20549</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'><b>FORM 8-K</b></p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>CURRENT REPORT</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>&nbsp;</p>
<p style='margin-top:5.0pt;margin-right:.25in;margin-bottom:5.0pt;margin-left:.25in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;
text-align:center'>Date of Report (Date of
earliest event reported): January 20, 2009</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>
<table class=MsoNormalTable border=0 cellpadding=0 width=640
 style='width:100%;border-collapse:collapse'>
	<tr>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
		</td>
	</tr>
	<tr>
		<td colspan=7 valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<b>Palmetto Bancshares, Inc.</b></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(Exact name of registrant as specified in its
  charter)</p></td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";margin-right:-17.05pt'>
		<u>South
  Carolina&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<u>&nbsp;&nbsp;&nbsp;&nbsp;
  0-26016&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></p></td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";text-align:right'>
		<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>State or other
  jurisdiction of <br>
		incorporation </p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>Commission File Number</p>
		</td>
		<td colspan=3 valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:right'>&nbsp;IRS Employer I.D. number</p>
		</td>
	</tr>
	<tr>
		<td colspan=2 valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;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:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr>
		<td colspan=4 valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>
		<u>301 Hillcrest Drive,
  Laurens, South Carolina</u></p></td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";text-align:right'>
		<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 29360</u></p></td>
	</tr>
	<tr>
		<td colspan=4 valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>Address of principal
  executive offices</p></td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";text-align:right'>Zip Code</p>
		</td>
	</tr>
	<tr>
		<td colspan=2 valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;
		</p></td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
		<td valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;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:12.0pt;font-family:"Times New Roman";'>&nbsp;</p>
		</td>
	</tr>
	<tr>
		<td colspan=7 valign=top style='padding:0in; '>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (864) 984-4551&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		<br>
		</u>Registrant's telephone number </p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>
		<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;
		N/A&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		</u></p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>(Former Name or Former Address, if Changed Since
  Last Report</p>
		<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:center'>&nbsp;</p>
		</td>
	</tr>
	<tr height=0>
		<td style='border:none'></td>
		<td style='border:none'></td>
		<td style='border:none'></td>
		<td style='border:none'></td>
		<td style='border:none'></td>
		<td style='border:none'></td>
		<td style='border:none'></td>
	</tr>
</table>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (<i>see</i> General
Instruction A.2. below):</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>[&nbsp; ] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>[&nbsp; ] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>[ ] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>&nbsp;</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";text-align:justify;text-indent:.25in'>[ ] Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<b><hr color="#000080"><br clear=all
style='page-break-before:always'></b>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt;text-align:center'>
<b>ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN
OFFICERS; <br>
ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; <br>
COMPENSATORY
ARRANGEMENTS OF CERTAIN OFFICERS.</b></p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>(b)
On January 20, 2009, Paul W. Stringer, the President, Chief Operating Officer, and Chief Accounting Officer of
Palmetto Bancshares, Inc. (the &#147;Company) and the Chairman and Chief Executive
Officer of The Palmetto Bank, announced
to the Board of Directors that he will retire from those positions effective
December 31, 2009. Following his retirement, Mr. Stringer will continue to
serve on the Board of Directors. The Board of Directors, under the direction of its
Chairman who has made available his
recommendations and evaluations of potential successors, is currently working
with the Compensation Committee to
complete its search for a successor(s). &nbsp;Until December 31, 2009, Mr. Stringer will continue
to receive salary and benefits at the same level and type as he currently
receives. </p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin:0in;margin-bottom:.0001pt'>&nbsp;</p>
<hr color="#000080"><br clear=all
style='page-break-before:always'>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:center'>
<b>SIGNATURES</b></p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";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";margin-right:-9.0pt;text-align:justify'>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:"Times New Roman";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";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";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";margin-right:-9.0pt;text-align:justify'>PALMETTO BANCSHARES, INC.</p>
<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";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";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";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";margin-right:-9.0pt;text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;<u>/s/
Paul W.
Stringer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u></p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;Paul
W. Stringer</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;President
and Chief Operating Officer</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;Chief
Accounting Officer</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
0in;margin-bottom:.0001pt;text-align:justify'>&nbsp;</p>
<p style='margin-right:0in;margin-left:0in;font-size:12.0pt;font-family:"Times New Roman";margin-top:0in;margin-right:-9.0pt;margin-bottom:0in;margin-left:
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<p style='margin:0in;margin-bottom:.0001pt;font-size:12.0pt;font-family:"Times New Roman";margin-right:-9.0pt;text-align:justify'>Date:&nbsp;&nbsp; January 28, 2009</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": "09551998"}, "business-address": {"street1": "301 HILLCREST DR", "street2": "P O BOX 49", "city": "LAURENS", "state": "SC", "zip": "29360", "phone": "8649844551"}}
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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 20, 2009
Palmetto Bancshares, Inc.
(Exact name of registrant as specified in its
  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
N/A
(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):
[  ] 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 5.02. DEPARTURE OF DIRECTORS OR CERTAIN
OFFICERS;
ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY
ARRANGEMENTS OF CERTAIN OFFICERS.
(b)
On January 20, 2009, Paul W. Stringer, the President, Chief Operating Officer, and Chief Accounting Officer of
Palmetto Bancshares, Inc. (the "Company) and the Chairman and Chief Executive
Officer of The Palmetto Bank, announced
to the Board of Directors that he will retire from those positions effective
December 31, 2009. Following his retirement, Mr. Stringer will continue to
serve on the Board of Directors. The Board of Directors, under the direction of its
Chairman who has made available his
recommendations and evaluations of potential successors, is currently working
with the Compensation Committee to
complete its search for a successor(s).  Until December 31, 2009, Mr. Stringer will continue
to receive salary and benefits at the same level and type as he currently
receives.
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/
Paul W.
Stringer
Paul
W. Stringer
President
and Chief Operating Officer
Chief
Accounting Officer
Date:   January 28, 2009