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 19, 2006

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 19, 2006, Palmetto Bancshares, Inc. issued a press release that disclosed the results of operations and financial condition of the Company for the three and six months ended June 30, 2006.

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 19, 2006.

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.
 

/s/Paul W. Stringer                                
Paul W. Stringer
President and Chief Operating Officer
(Chief Accounting Officer)

Date: July 19, 2006

EX-99.1

 

FOR IMMEDIATE RELEASE	For More Information Contact:
July 19, 2006	Cynthia Jamison, (864) 984-8395
	cjamison@palmettobank.com

Palmetto Bancshares, Inc. Reports
6% Year-to-Date Earnings Increase

UPSTATE, SC - Leon Patterson, chairman and chief executive officer of Palmetto Bancshares, Inc., parent company for The Palmetto Bank, reported net income for the six months ended June 30, 2006 was $7.4 million compared with $7.0 million reported the same period of 2005, an increase of 6%.  Diluted earnings per share were $1.15, as compared with $1.08 per share when comparing the same periods. For the second quarter of 2006, reported net income was $3.7 million, a 5% increase over the same period in 2005.  Net income per diluted share was $.58, a 5% increase over the $.55 per share reported in the second quarter of 2005.

Total assets at June 30 grew 6% to $1.1 billion, an increase of $64.1 million over the same period in 2005.  At June 30, 2006, loans increased 7% to $892.4 million, while deposits rose to $1.0 billion, a 12% increase over the same period in 2005.  "We are pleased with the Bank's consistently strong performance during this past quarter and the past six months," said Leon Patterson, chairman and chief executive officer.  "We are in preparation for the opening of our new Boiling Springs office - our sixth location in Spartanburg County.  We look forward to the added growth the location will bring to our company."

Celebrating 100 years of service in the Upstate, The Palmetto Bank manages $1.8 billion in assets including Commercial Banking, Trust and Investment Group and Mortgage Servicing.  The Palmetto Bank is the fifth largest independent state-chartered commercial bank in South Carolina with 31 locations throughout the Upstate counties of Abbeville, Anderson, Cherokee, Greenville, Greenwood, Laurens, Oconee, Pickens and Spartanburg.

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