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): February 2, 2011

Palmetto Bancshares, Inc.

(Exact name of registrant as specified in its charter)

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):

SECTION 5 – CORPORATE GOVERNANCE AND MANAGEMENT

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(b) As previously disclosed in the Current Report on Form 8-K of Palmetto Bancshares, Inc. (the “Company”) filed with the Securities and Exchange Commission (the “SEC”) on November 12, 2010, effective November 29, 2010 the Company announced that Roy D. Jones had been named Chief Accounting Officer of the Company and The Palmetto Bank, a wholly-owned subsidiary of the Company (the “Bank”). The Company also announced that Mr. Jones would assume the role of Chief Financial Officer of the Company and the Bank upon receipt of the necessary non-objections from the applicable bank regulatory agencies. As described below, the Company received the necessary non-objections from the applicable bank regulatory agencies effective February 2, 2011 and has named Mr. Jones to the role of Chief Financial Officer of the Company and the Bank.

In connection with the naming of Mr. Jones as Chief Financial Officer of the Company and the Bank, Lee S. Dixon resigned his position as Chief Financial Officer of the Company and the Bank effective February 2, 2011. Mr. Dixon will continue in his current roles as the Chief Operating Officer and Chief Risk Officer of the Company and the Bank.

(c) Effective November 29, 2010, the Company announced that Roy D. Jones, 42, had been named Chief Accounting Officer of the Company and the Bank; with the intention of naming Mr. Jones to the role of Chief Financial Officer upon receipt of the necessary non-objections from the applicable bank regulatory agencies. Effective February 2, 2011, the Company received the last of the necessary non-objections from the applicable bank regulatory agencies and appointed Mr. Jones to the role of Chief Financial Officer of the Company and the Bank effective as of that date.

Mr. Jones has 20 years of finance experience in the banking industry. Prior to being hired by the Company, Mr. Jones was employed by The South Financial Group most recently as Executive Vice President – Director of Finance and Investor Relations. While at The South Financial Group, Mr. Jones also served in the role of Senior Vice President – Director of Money Markets and Derivatives. Between 2001 and 2004, Mr. Jones served as Chief Financial Officer and Senior Vice President – Corporate Development for CNB Florida Bancshares, Inc. (acquired by The South Financial Group in 2004). Mr. Jones served in various capacities (including Senior Vice President – Corporate Treasury, Vice President – Accounting Policy, and Corporate Financial Reporting and Accounting Manager) for Bank of America from 1997 until 2001. Prior to his service with Bank of America, he served in financial reporting roles for two companies. Mr. Jones began his career with Price Waterhouse LLP in 1990.

Mr. Jones has extensive accounting and financial reporting expertise from his years of business experience and has worked with small community banks to some of the largest national banks. His background has provided him with substantial banking, regulatory, management and financial reporting, and risk management experience.

Mr. Jones received a Bachelor of Business Administration with a major in accounting from the University of North Florida and a Master of Accounting degree from the University of Florida and is a Certified Public Accountant in both Florida and South Carolina.

Mr. Jones will be entitled to participation in retirement, health, dental, welfare and other benefit plans and programs of the Company applicable to employees generally and/or to senior executives.

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.