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): May 16, 2013

Palmetto Bancshares, Inc.

(Exact name of registrant as specified in its charter)

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

306 East North Street, Greenville, South Carolina	29601
Address of principal executive offices	Zip Code

800.725.2265

Registrant’s telephone number

N/A

(Former Name or Former Address, if Changed Since Last Report)

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))

SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT

Item 5.07 Submission of Matters to a Vote of Security Holders

On May 16, 2013, Palmetto Bancshares, Inc. (the “Company”) held its 2013 Annual Meeting of Shareholders (the “Annual Meeting”). Of the 12,762,452 shares outstanding and entitled to vote at the Annual Meeting, 11,574,997 were present in person or by proxy, and the following matters were voted upon and approved by the Company’s shareholders at the Annual Meeting:

		Proposal	Votes For	Votes Withheld	Broker Non- Votes
1	The election as Directors of all nominees listed below, each to serve a term as follows:
		Term Expiring at the 2016 Annual Meeting
		Lee S. Dixon	11,070,360	143,214	361,423
		Samuel L. Erwin	11,082,896	130,678	361,423
		James J. Lynch	11,136,402	77,172	361,423
		Proposal	Votes For	Votes Against	Abstained
2	The ratification of the appointment of Elliott Davis LLC as our independent registered public accounting firm for fiscal year 2013.		11,402,141	119,815	53,041
		Proposal	Votes For	Votes Against	Abstained	Broker Non- Votes
3	The amendment of the 2011 Stock Incentive Plan to increase the number of shares of common stock issuable under the plan by 200,000 shares.		10,870,619	342,930	25	361,423

SECTION 7 - REGULATION FD

Item 7.01. Regulation FD Disclosure

During the Annual Meeting, an informational update was presented by Samuel L. Erwin, Chief Executive Officer. A copy of the presentation is attached as Exhibit 99.1 and is incorporated herein by reference.

The information in Item 7.01 is being furnished, not filed. Accordingly, the information in this Item 7.01 will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933 unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by the Company that (i) the information in this report is material or complete or (ii) investors should consider this information before making an investment decision with respect to any security of the Company or any of its affiliates.

The information in Item 7.01 and Exhibit 99.1 of Item 9.01 contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements are identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” and “projects,” as well as similar expressions. Forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Factors which could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements include, but are not limited to: (1) the strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations which could result in, among other things, a deterioration in the credit quality or a

reduced demand for credit, including the resultant effect on our loan portfolio and allowance for loan losses and the rate of delinquencies and amounts of charge-offs, or adverse changes in asset quality in our loan portfolio, which may result in increased credit-related losses and expenses; (2) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) and the impact of such conditions on the Company, and the timing and amount of future capital raising activities by the Company, if any; and (3) actions taken by banking regulatory agencies related to the banking industry in general and the Company or the Bank specifically. The assumptions underlying the forward-looking statements could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our Company or any person that the future events, plans, or expectations contemplated by our Company will be achieved. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the U.S. Securities and Exchange Commission (the “SEC”) and available at the SEC’s Internet site (http://www.sec.gov), including the “Risk Factors” included therein. All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect changes in circumstances or events that occur after the date the forward-looking statements are made.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Item Number	Exhibit
99.1	Presentation delivered at Palmetto Bancshares, Inc.’s Annual Meeting of Shareholders on May 16, 2013

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 hereunto duly authorized.

PALMETTO BANCSHARES, INC.

By:

/s/ Roy D. Jones

Roy D. Jones

Chief Financial Officer

Date: May 17, 2013

INDEX TO EXHIBITS

Item Number	Exhibit
99.1	Presentation delivered at Palmetto Bancshares, Inc.’s Annual Meeting of Shareholders on May 16, 2013

EX-99.1

Annual Meeting of Shareholders

May 16, 2013

1

Palmetto Bancshares, Inc.

Holding Company for

NASDAQ:

PLMT

Exhibit 99.1

Informational Update to Shareholders:

Samuel L. Erwin, Chief Executive Officer

2

NASDAQ:

PLMT

Forward Looking Statements

Certain

statements

in

this

presentation

contain

“forward-looking

statements”

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995,

such

as

statements

relating

to

future

plans

and

expectations,

and

are

thus

prospective.

Such

forward-looking

statements

are

identified

by

words

such

as

“believes,”

“expects,”

“anticipates,”

“estimates,”

“intends,”

“plans,”

“targets,”

and

“projects,”

as

well

as

similar

expressions.

Forward-looking

statements

are

subject

to

risks,

uncertainties,

and

other

factors

which

could

cause

actual

results

to

differ

materially

from

future

results

expressed

or

implied

by

such

forward-looking

statements.

Factors

which

could

cause

actual

results

to

differ

materially

from

the

anticipated

results

or

other

expectations

expressed

in

the

forward-looking

statements

include,

but

are

not

limited

to:

(1)

the

strength

of

the

United

States

economy

in

general

and

the

strength

of

the

local

economies

in

which

the

Company

conducts

its

operations

which

could

result

in,

among

other

things,

a

deterioration

in

the

credit

quality

or

a

reduced

demand

for

credit,

including

the

resultant

effect

on

our

loan

portfolio

and

allowance

for

loan

losses

and

the

rate

of

delinquencies

and

amounts

of

charge-offs,

or

adverse

changes

in

asset

quality

in

our

loan

portfolio,

which

may

result

in

increased

credit

risk-related

losses

and

expenses;

(2)

adverse

conditions

in

the

stock

market,

the

public

debt

market

and

other

capital

markets

(including

changes

in

interest

rate

conditions)

and

the

impact

of

such

conditions

on

the

Company,

and

the

timing

and

amount

of

future

capital

raising

activities

by

the

Company,

if

any;

and

(3)

actions

taken

by

banking

regulatory

agencies

related

to

the

banking

industry

in

general

and

the

Company

or

the

Bank

specifically.

The

assumptions

underlying

the

forward-looking

statements

could

prove

to

be

inaccurate.

Therefore,

we

can

give

no

assurance

that

the

results

contemplated

in

the

forward-looking

statements

will

be

realized.

The

inclusion

of

this

forward-looking

information

should

not

be

construed

as

a

representation

by

our

Company

or

any

person

that

the

future

events,

plans,

or

expectations

contemplated

by

our

Company

will

be

achieved.

Additional

factors

that

could

cause

our

results

to

differ

materially

from

those

described

in

the

forward-looking

statements

can

be

found

in

our

reports

(such

as

Annual

Reports

on

Form

10-K,

Quarterly

Reports

on

Form

10-Q

and

Current

Reports

on

Form

8-K)

filed

with

the

U.S.

Securities

and

Exchange

Commission

(the

“SEC”)

and

available

at

the

SEC’s

Internet

site

(http://www.sec.gov),

including

the

“Risk

Factors”

included

therein.

All

subsequent

written

and

oral

forward-looking

statements

concerning

the

Company

or

any

person

acting

on

its

behalf

is

expressly

qualified

in

its

entirety

by

the

cautionary

statements

above.

We

do

not

undertake

any

obligation

to

update

any

forward-looking

statement

to

reflect

changes

in

circumstances

or

events

that

occur

after

the

date

the

forward-looking

statements

are

made.

3

NASDAQ:

PLMT

Commitments to our Shareholders

1.

Communicate regularly

2.

Provide clear and transparent information

3.

Be accessible and visible

4.

Listen to concerns and suggestions

5.

Continue the rich legacy of our 106-year old

institution

6.

Protect the reputation of The Palmetto Bank

7.

Work hard with dedication and perseverance to

recover and optimize shareholder value

4

NASDAQ:

PLMT

Economic, Industry and Market

Challenges Continue…

1.

Sluggish and slow growth economy

2.

Improving but uneven loan production

3.

Federal Reserve interest rate policy resulting in low

interest rate environment and net interest margin

compression

4.

Revenue pressures and increasing regulatory costs

5.

Highly competitive market in the Upstate of South

Carolina

6.

Ongoing industry consolidation (at 12/31/12, down

1,451

(17%)

from

8,534

at

12/31/07

and

down

8,075

(53%)

from

15,158

at

12/31/90)

5

NASDAQ:

PLMT

How is the Industry Responding?

6

First

Quarter

2013

Bank

Earnings

Releases

–

Focus

on

Expenses

“Calling expense control a "major focus," BB&T Corp. Chairman, President and CEO Kelly

King said the U.S. economy will probably remain in a slow-growth mode for the next two or

three years, so the company needs to adjust its business strategies accordingly.”

–

SNL 4/18/13

“Our relentless focus on capital, liquidity, and expense reduction…”

-

Bank of America First Quarter 2013 Earnings Release 4/17/13

“…expenses continued to decline as we improved efficiency across the franchise…”

-

Wells Fargo First Quarter 2013 Earnings Release 4/12/13

“…we remain committed to disciplined expense management over the course of the year.”

-

PNC First Quarter 2013 Earnings Release 4/17/13

“

The Company remains focused on strategic efficiency and addressing the ongoing

environmental impact to the banking industry of increased regulatory compliance costs,

revenue pressures on fee income, and net interest margin challenges…”

-

Earnings Release 4/24/13

NASDAQ:

PLMT

The Palmetto Bank:

Building Momentum…

7

NASDAQ:

PLMT

Sustained Profitability

1.

Three consecutive quarters of profitability

through March 31, 2013

2.

Expected to continue for the remainder of 2013

3.

Potential

quarterly

earnings

“lumpiness”

from

strategic quarterly resolution of the few

remaining problem assets

8

NASDAQ:

PLMT

Improving Asset Quality

9

NASDAQ:

PLMT

$92,532

$96,936

$113,181

$91,653

$90,773

$91,405

$85,099

$71,739

$75,007

$53,028

$45,544

$24,176

$19,879

$15,848

$17,106

$27,765

$28,014

$28,980

$26,627

$22,638

$20,087

$16,385

$15,334

$14,851

$27,824

$26,789

$14,746

$11,647

$10,991

$11,088

$120,297

$124,950

$142,161

$118,280

$113,411

$111,492

$101,484

$87,073

$89,858

$80,852

$72,333

$38,922

$31,526

$26,839

$28,194

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

3Q 2009

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

1Q 2011

2Q 2011

3Q 2011

4Q 2011

1Q 2012

2Q 2012

3Q 2012

4Q 2012

1Q 2013

Nonaccrual loans

OREO and Repossessed Autos

NPA to total assets

Exited Consent Order

1.

Consent Order terminated in January 2013

2.

Continued favorable regulatory relations

3.

Positive feedback and confirmation of progress from

ongoing examinations

10

NASDAQ:

PLMT

New Technology to Enhance the

Client Experience

NASDAQ:

PLMT

11

Winning in the Market, Including with Larger

and More Sophisticated Companies

NASDAQ:

PLMT

12

Stock Price Trading at Premium

to Book Value

13

1.

2012 common stock increase of 70% (from

$5.05 to $8.58)

2.

Stock price as of May 15, 2013 = $13.90

(increase of 62% from December 31, 2012)

-

178% of Book Value as of March 31, 2013

NASDAQ:

PLMT

-

146% of Pro Forma* Book Value as of

March 31, 2013

   Including projected partial recapture of the valuation allowance

on the deferred tax asset

*

The Palmetto Bank:

Looking Forward…

14

NASDAQ:

PLMT

Summary of Evolution of Focus

•

2009

–

Quantify depth of credit loss hole

–

Implement Strategic Project Plan

–

Prepare for regulatory agreement

•

2010

–

Raise capital ($114 million in

October 2010)

–

Process improvement

–

Change management

–

Consent Order

•

2011

–

Performance culture and talent

management

–

Infrastructure

–

Operating earnings

–

Client focus

•

2012

–

Return to profitability

–

Substantial resolution of

remaining problem assets

–

Expense reductions

–

Technology enhancements

–

Expanded niche lending

•

2013

Exit Consent Order

Sustained and predictable

earnings

“Final”

resolution of problem

assets

Value creation, including the

Client Experience and

Teammate Experience

NASDAQ:

PLMT

15

Clear Focus on

Value Creation Strategy

16

NASDAQ:

PLMT

What actions do we need to take to increase

the Value of The Palmetto Bank Franchise

1.

2.

Are all of our actions contributing to an 

enhanced Client Experience

3.

Are we cultivating a Teammate Experiencethat

inspires us to do our best and win?

?

?

Big Picture Strategy –

Line of Business Delineation

with Tailored Go-To-Market Strategies

1.

Retail

Banking,

including

consumer

banking

services

and

lending, Mortgage, Credit Cards and Indirect Auto

2.

Commercial

Banking,

including

Small

Business

Administration loans, Business Banking, Corporate Banking,

Treasury Management and Merchant Services

3.

Wealth

Management,

including

Trust,

Brokerage,

Insurance,

and Financial Planning (and potential addition of Private

Banking)

4.

Support

Groups:

enable

the

above

with

disciplined

expense

management and sound risk management

By line of business, tailored go-to-market strategies, products,

services, bundled offerings, expertise, technology,

infrastructure, marketing, etc.

17

NASDAQ:

PLMT

Summary Themes for Success in 2013

1.

Growth,

including

loans,

core

deposits,

households

and

revenues

2.

Client

Experience,

including

tailored

strategies

by

line

of

business and specialized operational support

3.

Continuous

improvement,

including

process,

systems

and

technology for  seamless processing and operational

excellence

4.

Strategic

efficiency,

with

refined

processes

and

efficiency

for competitive advantage

5.

Capital

planning,

taking

into

consideration

organic

balance

sheet growth, evolving Basel III capital rules, dividend and

M&A preparation

6.

Teammate

Experience,

including

commitment

to

excellence

and a winning mindset

18

NASDAQ:

PLMT

Closing Thoughts

19

NASDAQ:

PLMT

Value of The Palmetto Bank

Franchise

1.

106 year legacy with excellent reputation and strong brand

recognition

2.

Historical high performing financial results, with history of

innovation and balanced and fair pricing to our clients

3.

Premier deposit-gathering franchise in an attractive and

vibrant banking market with strong deposit gathering

capability

a.

Greenville

mentioned

as

a

“booming

city”

in

a

recent

American Banker

article

4.

Heritage of deep client relationships and loyalty, with high

touch client service platform being leveraged for enhanced

sales culture

5.

Experienced, specialized and dedicated team committed to

excellence

Positive

momentum

and

outlook!

20

NASDAQ:

PLMT

Building Shareholder Value

Even with a 106 year history,

legacy is more about

what is in front of us

than what is behind us…

Someone’s sitting in the shade today

because someone planted a tree a long time ago.

--Warren Buffet

21

NASDAQ:

PLMT

Thank

you

for

your

support!

22

NASDAQ:

PLMT