Securities and Exchange Commission
Washington, D.C. 20549


April 23, 2001


Ladies and Gentlemen:

We were previously principal accountants for Palmetto Bancshares, Inc. and,
under the date of February 9, 2001, we reported on the consolidated financial
statements of Palmetto Bancshares, Inc. and subsidiaries as of and for the years
ended December 31, 2000 and 1999. On April 17, 2001, our appointment as
principal accountants was terminated. We have read Palmetto Bancshares, Inc.'s
statements included under Item 4 of its Form 8-K dated April 17, 2001, and we
agree with such statements, except that we are not in a position to agree or
disagree with the following:

*    Palmetto Banchsares, Inc.'s statement that the change was recommended by
     Palmetto Bancshares, Inc.'s audit committee; and

*    Palmetto Bancshares, Inc.'s statement that Elliott Davis & Company, LLP was
     not consulted regarding the application of accounting principles to a
     specified transaction, either completed or proposed, or the type of audit
     opinion that might be rendered on Palmetto Bancshares, Inc.'s financial
     statements.


Very truly yours,

/s/ KPMG LLP