[Palmetto Bank Logo Omitted]


FOR IMMEDIATE RELEASE                       FOR MORE INFORMATION CONTACT:
APRIL 10, 2003                              PENNY KREIN, 864/984-8395
                                            kreinp@palmettobank.com



             PALMETTO BANCSHARES, INC. REPORTS RECORD FIRST QUARTER

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, 2003 of $2.9 million,  an 18.2%  increase over the
same period of 2002.

Net income per share  (diluted)  was $.45,  an 18.4%  increase over the $.38 per
diluted share reported for the first quarter of 2002.

Return on average  shareholders'  equity was 17.01% for the three  months  ended
March 31, 2003,  compared with 16.33% for the end of first quarter 2002.  Return
on average  assets for first quarter 2003 was 1.42%,  up from 1.34% for the same
period of 2002.

Total assets at the end of the first quarter were $853.1 million, an increase of
11.6%, or $88.6 million, over total assets at March 31, 2002.

At March 31, 2003,  total loans increased  15.6% to $657.7 million,  while total
deposits rose to $772.0 million, a 10.7% increase over March 31, 2002.

"We  attribute  the success of the first  quarter to record  asset  growth and a
significant boost from both interest and non-interest income sources, as well as
excellent  overhead  expense  control," said Leon Patterson,  chairman and chief
executive officer.

As The Palmetto Bank, one of the oldest community banks in South Carolina, nears
its one  hundredth  birthday,  we continue  to strive  toward our 2006 vision of
becoming the Upstate's  leading  community  bank.  Founded in 1906, The Palmetto
Bank is an independent  Upstate based financial  institution,  currently with 30
locations in twenty  communities  throughout the Upstate  counties of Abbeville,
Anderson, Cherokee, Greenville, Greenwood, Laurens, Oconee, and Spartanburg.


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(Date Reported: April 10, 2003)