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): October 20, 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 October 20, 2005,  Palmetto  Bancshares,  Inc.  issued a press  release which
discloses the results of operations  and financial  condition of the Company for
the third quarter ended September 30, 2005.

For  more  information  regarding  this  matter,  see the press release attached
hereto as Exhibit 99.


ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits

       99     Press Release issued October 20, 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


/s/ Paul W. Stringer
- -------------------------------------
Paul W. Stringer
President and Chief Operating Officer
(Chief Accounting Officer)


Date:   October 25, 2005