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 21, 2005


                            PALMETTO BANCSHARES, INC.
               (Exact name of registrant as specified in charter)


South Carolina                      0-26016                   74-2235055
- ----------------------------     -----------------      -----------------------
State or other jurisdiction    Commission File Number   IRS Employer I.D. number
of incorporation


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 21, 2005, Palmetto Bancshares, Inc. issued a press release which
discloses the results of operations and financial condition of the Company for
the first quarter ended March 31, 2005.

For more information regarding this matter, see the shareholder earnings
overview attached hereto as Exhibit 99.


ITEM 9.01.        FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits

    99   Press Release issued April 21, 2005



                                   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
Chairman and Chief Executive Officer
The Palmetto Bank


Date:  April 21, 2005

EX-99

FOR IMMEDIATE RELEASE                    For More Information, Contact:
April 21, 2005                           Ana Miles, 864/984-8330
                                         amiles@palmettobank.com



               Palmetto Bancshares, Inc. Surpasses $1 Billion Mark
                     while Increasing Earnings 12.6% during
                               1st Quarter of 2005

UPSTATE, SOUTH CAROLINA - 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, 2005, of $3.4 million, a 12.6%
gain over the $3.0 million earned for the same period of 2004. Net income per
share (diluted) was $0.53, a 10.4% increase over the $0.48 per diluted share
reported for the first quarter of 2004. For the quarter ended March 31, 2005,
Palmetto Bancshares, Inc. reported a 16.74% return on average shareholders'
equity and a 1.37% return on average assets.

Total assets at the end of the first quarter were $1.0 billion,  an increase
of 14.6%, or $130.6  million, over total assets at March 31, 2004. At March 31,
2005, total loans  increased  13.3% to $808.3 million over March 31, 2004, while
total deposits rose to $871.1 million, a 7.1% increase over the same periods.

During its March board meeting, the Board of Directors approved a cash dividend
of $0.16 per share an increase of 14.3% over the cash dividend of $0.14 declared
for the first quarter of 2004.

"These are exciting times for our company reaching the $1 billion mark in the
first quarter of our 99th year.  This gives us reason for optimism about the
rest of the year and acceptance of our brand across the Upstate," said Leon
Patterson, chairman and chief executive officer.

Serving the Upstate for more than 99 years,  The Palmetto  Bank manages $1.7
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 31 locations throughout
the Upstate counties of Abbeville, Anderson, Cherokee, Greenville, Greenwood,
Laurens, Oconee, Pickens, and Spartanburg.


                                      # # #

(Date Reported: April 21, 2005)