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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 GB2N1cki24njQ1/aVfwwicFEvuhlsBEKpfrfYNVSbN5Shz+53MMacTfzsSYRxPbe
 VQGdIisOPCTyFl184tSwMg==

<SEC-DOCUMENT>0001246065-09-000002.txt : 20090217
<SEC-HEADER>0001246065-09-000002.hdr.sgml : 20090216
<ACCEPTANCE-DATETIME>20090217180723
ACCESSION NUMBER:		0001246065-09-000002
CONFORMED SUBMISSION TYPE:	5
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20080507
FILED AS OF DATE:		20090217
DATE AS OF CHANGE:		20090217

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			DAVIS WILLIAM FRED JR
		CENTRAL INDEX KEY:			0001246065

	FILING VALUES:
		FORM TYPE:		5
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-26016
		FILM NUMBER:		09616306

	MAIL ADDRESS:	
		STREET 1:		C/O PALMETTO BANCSHARES INC
		STREET 2:		PO BOX 49 301 HILLCREST DRIVE
		CITY:			LAURENS
		STATE:			SC
		ZIP:			29360

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PALMETTO BANCSHARES INC
		CENTRAL INDEX KEY:			0000706874
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				742235055
		STATE OF INCORPORATION:			SC
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		301 HILLCREST DR
		STREET 2:		P O BOX 49
		CITY:			LAURENS
		STATE:			SC
		ZIP:			29360
		BUSINESS PHONE:		8649844551
</SEC-HEADER>
<DOCUMENT>
<TYPE>5
<SEQUENCE>1
<FILENAME>primary_doc.xml
<DESCRIPTION>PRIMARY DOCUMENT
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>5</documentType>

    <periodOfReport>2008-05-07</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <form3HoldingsReported>0</form3HoldingsReported>

    <form4TransactionsReported>1</form4TransactionsReported>

    <issuer>
        <issuerCik>0000706874</issuerCik>
        <issuerName>PALMETTO BANCSHARES INC</issuerName>
        <issuerTradingSymbol>n/a</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001246065</rptOwnerCik>
            <rptOwnerName>DAVIS WILLIAM FRED JR</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O PALMETTO BANCSHARES INC</rptOwnerStreet1>
            <rptOwnerStreet2>PO BOX 49 301 HILLCREST DRIVE</rptOwnerStreet2>
            <rptOwnerCity>LAURENS</rptOwnerCity>
            <rptOwnerState>SC</rptOwnerState>
            <rptOwnerZipCode>29360</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock, $5 Par Value</value>
            </securityTitle>
            <transactionDate>
                <value>2008-05-07</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionTimeliness>
                <value>L</value>
            </transactionTimeliness>
            <transactionAmounts>
                <transactionShares>
                    <value>1000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>42</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>34717</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F1"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <footnotes>
        <footnote id="F1">Includes 4,708 owned directly by Mr. Davis, 14,800 shares owned directly by Mr. Davis and his wife, and 15,209 shares owned directly by Mr. Davis in his Delaware Charter account.  Does not include indirct beneficial ownership shares as this transaction did not impact such shares.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Lauren S Greer, with POA, Accounting and Finance Manager, The Palmetto Bank, a wholly owned subsidiary of Palmetto Bancshares, Inc.</signatureName>
        <signatureDate>2009-02-17</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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