Item 8.01. Other Events

On February 1, 2013, The Palmetto Bank (the "Bank"), the wholly-owned banking subsidiary of Palmetto Bancshares, Inc. (the "Company"), received notification from the Federal Deposit Insurance Corporation and South Carolina State Board of Financial Institutions (the "Supervisory Authorities") that the Consent Order it has been operating under since June 10, 2010 was terminated effective January 30, 2013.

The Consent Order included nineteen specific requirements primarily related to governance, management, capital, credit quality, earnings, and liquidity. The Company filed a copy of the Consent Order with the Securities and Exchange Commission as Exhibit 10.2 to its Form 8-K filed on June 11, 2010.

Although the Consent Order has been terminated, certain regulatory requirements and restrictions remain, including requirements to continue to improve credit quality and earnings, restriction prohibiting dividend payments without prior approval from the Supervisory Authorities, and the maintenance of a specified leverage capital ratio.

On February 4, 2013, the Bank issued a news release announcing the termination of the Consent Order. A copy of the news release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Item Exhibit
99.1 News Release dated February 4, 2013

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