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): April 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 April 18, 2007, Palmetto Bancshares, Inc. issued a press release that disclosed the results of operations and financial condition of the Company for the three months ended March 31, 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 April 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.

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

Date: April 20, 2007

EX-99.1

 
 

FOR IMMEDIATE RELEASE	For More Information Contact:
April 18, 2007	Cynthia Jamison, (864) 984-8395
	cjamison@palmettobank.com

Palmetto Bancshares, Inc. Reports
3% Quarterly 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 quarter ending March 31, 2007 of $3.8 million compared to $3.7 million reported during the same period of 2006.  Net income per share (diluted) was $0.58 for the first three months of 2007, a 2% increase over the $0.57 per diluted share during the same period of 2006.  For the quarter ended March 31, 2007, Palmetto Bancshares, Inc. reported a 14.94% return on average shareholders' equity and a 1.32% return on average assets.

Total assets at quarter end were $1.2 billion, up 6% or $68.4 million over the quarter ended March 31, 2006.  When comparing the same periods, total loans increased 11% to $958.4 million, and total deposits increased 7% to $1.1 billion.

Celebrating more than 100 years of service in the Upstate, The Palmetto Bank manages $1.953 billion in assets including Commercial Banking, Trust, Brokerage and Mortgage Servicing.  The Palmetto Bank is the fifth largest independent state-chartered commercial bank in South Carolina with 32 locations throughout the Upstate counties of Abbeville, Anderson, Cherokee, Greenville, Greenwood, Laurens, Oconee, Pickens and Spartanburg.