U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.20549

                                   FORM 10-K/A

X  ANNUAL REPORT  PURSUANT TO SECTION 13  OR  15(d)  OF  THE  SECURITIES
   EXCHANGE   ACT  OF  1934
                  For the fiscal year ended December 31, 2003

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
   ACT OF 1934
                  For the transition period from _____ to _____

                         Commission file number 0-26016

                            PALMETTO BANCSHARES, INC.
                            -------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

       SOUTH CAROLINA                                       74-2235055
(STATE OR OTHER  JURISDICTION                              (IRS EMPLOYER
 OF  INCORPORATION  OR  ORGANIZATION)                   IDENTIFICATION NO.)

   301 HILLCREST DRIVE, LAURENS, SOUTH CAROLINA               29360
         (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)          (ZIP CODE)

          (864) 984-4551                           PALMETTOBANK.COM
  (REGISTRANT 'S TELEPHONE NUMBER)        (REGISTRANT 'S SUBSIDIARY 'S WEB SITE)

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                     COMMON STOCK, PAR VALUE $5.00 PER SHARE
                     ---------------------------------------
                                (TITLE OF CLASS)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.      Yes X      No

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of the Annual  Report on Form 10-K filed
March 15, 2004 or any amendment to that Form 10-K.     Yes X      No

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Exchange Act Rule 126-2).       Yes X       No

         The  aggregate  market  value  of the  voting  common  equity  held  by
non-affiliates  of the  registrant  (computed by reference to the price at which
the  common  equity  was most  recently  sold) was  $160,598,839  as of the last
business day of the registrant 's most recently completed second fiscal quarter.
There is no established  public trading market for the shares. See Part II, Item
5 of the Annual Report on Form 10-K filed March 15, 2004.

                       DOCUMENTS INCORPORATED BY REFERENCE


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         The Company's  Proxy  Statement dated March 15, 2004 with respect to an
Annual  Meeting of  Shareholders  to be held  April 20,  2004:  Incorporated  by
reference in Part III of the Annual Report on Form 10-K filed March 15, 2004.


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                                EXPLANATORY NOTE

This is Amendment No. 1 to the  Registrant's  Annual Report on Form 10-K for the
year ended December 31, 2003, which was originally filed with the Securities and
Exchange  Commission on March 15, 2004. This amendment is being filed to replace
the Exhibit 23.1 that was originally filed.



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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

         (a)      (1)      Financial Statements

                           See Item 8 of the  Annual  Report on Form 10-K  filed
                           March 15, 2004.

                  (2)      Financial Statement Schedules

                           Financial statement schedules are omitted as they are
                           not   applicable  or  the  required   information  is
                           included in the Consolidated  Financial Statements or
                           related notes to  Consolidated  Financial  Statements
                           required by Item 8 for Form 10-K and  included in the
                           Annual Report on Form 10-K filed March 15, 2004.

                  (3)      Listing of Exhibits

                           EXHIBIT NO.      DESCRIPTION
                           3.1.1            Articles of  Incorporation  filed on
                                            May 13,  1982 in the  office  of the
                                            Secretary    of   State   of   South
                                            Carolina:  Incorporated by reference
                                            to   Exhibit  3  to  the   Company's
                                            Registration  Statement on Form S-4,
                                            Commission File  No.33-19367,  filed
                                            with  the  Securities  and  Exchange
                                            Commission on December 30, 1987

                           3.1.2            Articles of  Amendment  filed on May
                                            5,   1988  in  the   office  of  the
                                            Secretary    of   State   of   South
                                            Carolina:  Incorporated by reference
                                            to  Exhibit  4.1.2 to the  Company's
                                            Registration  Statement on Form S-8,
                                            Commission  File  No.33-51212  filed
                                            with  the  Securities  and  Exchange
                                            Commission on August 20, 1992

                           3.1.3            Articles  of   Amendment   filed  on
                                            January  26,  1989 in the  office of
                                            the  Secretary  of  State  of  South
                                            Carolina:  Incorporated by reference
                                            to  Exhibit  4.1.3 to the  Company's
                                            Registration  Statement on Form S-8,
                                            Commission  File  No.33-51212  filed
                                            with  the  Securities  and  Exchange
                                            Commission on August 20, 1992

                           3.1.4            Articles of Amendment filed on April
                                            23,   1990  in  the  office  of  the
                                            Secretary    of   State   of   South
                                            Carolina:  Incorporated by reference
                                            to  Exhibit  4.1.4 to the  Company's
                                            Registration  Statement on Form S-8,
                                            Commission  File  No.33-51212  filed
                                            with  the  Securities  and  Exchange
                                            Commission on August 20, 1992

                           3.1.5            Articles  of   Amendment   filed  on
                                            October  16,  1996 in the  office of
                                            the  Secretary  of  State  of  South
                                            Carolina:  Incorporated by reference
                                            to  Exhibit  3.1.5 to the  Company's
                                            Quarterly  Report  on Form  10-Q for
                                            the fiscal  quarter ended  September
                                            30, 1996

                           3.1.6            Articles of  Amendment  filed on May
                                            17,   1999  in  the  office  of  the
                                            Secretary    of   State   of   South
                                            Carolina:  Incorporated by reference
                                            to  Exhibit  3.1.6 of the  Company's
                                            Quarterly  Report  on Form  10-Q for
                                            the  fiscal  quarter  ended June 30,
                                            1999

                           3.2.1            By-Laws   adopted  April  10,  1990.
                                            Incorporated by reference to Exhibit
                                            3.2.1 to the  Company 's 1996 Annual
                                            Report on Form 10-K,  filed with the

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                                            Securities  and Exchange  Commission
                                            on March 30, 1997

                           3.2.2            Amendment to By-Laws dated April 12,
                                            1994.  Incorporated  by reference to
                                            Exhibit 3.2.2 to the Company's  1996
                                            Annual  Report on Form  10-K,  filed
                                            with  the  Securities  and  Exchange
                                            Commission on March 30, 1997

                           3.2.3            Amendment to By-Laws  dated  January
                                            19, 1999.  Incorporated by reference
                                            to  Exhibit  3.2.3 to the  Company's
                                            1998  Annual  Report  on Form  10-K,
                                            filed   with  the   Securities   and
                                            Exchange  Commission  on  March  19,
                                            1999

                           4.1.1            Articles of  Incorporation   of  the
                                            Registrant:   Included  in  Exhibits
                                            3.1.1 -.5

                           4.2              Bylaws of the  Registrant:  Included
                                            in Exhibit 3.2.1 -.3

                           4.3              Specimen  Certificate   for   Common
                                            Stock: Incorporated by  reference to
                                            Exhibit   4.3   to   the   Company's
                                            Registration  Statement on Form S-8,
                                            Commission File No.33-51212,   filed
                                            with the  Securities  and   Exchange
                                            Commission on August 20, 1992

                           4.4              Palmetto Bancshares, Inc. 1997 Stock
                                            Compensation  Plan,  as  amended  to
                                            date. Incorporated  by  reference to
                                            Exhibit 10.1 to the  Company's  1997
                                            Annual Report on Form  10-K,   filed
                                            with  the  Securities  and  Exchange
                                            Commission  on  March  23, 1998

                           4.4.1            Amendment   to      the     Palmetto
                                            Bancshares,   Inc 's   1997    Stock
                                            Compensation Plan. Approved by   the
                                            Company's   Board  of   Directors on
                                            January 21,  2003   and   by     the
                                            Company's shareholders on  April 15,
                                            2003

                           10.1 *           Palmetto   Bancshares,  Inc.   Stock
                                            Option    Plan:   Incorporated    by
                                            reference to Exhibit 10 (a)  to  the
                                            Company's  Registration Statement on
                                            Form S4,   Commission   File  No.33-
                                            19367, filed with the Securities and
                                            Exchange Commission on May 2, 1988

                           10.2 *           The Palmetto Bank Pension Plan   and
                                            Trust   Agreement:   Incorporated by
                                            reference to Exhibit  10 (c) to  the
                                            Company's Registration Statement  on
                                            Form S-4,   Commission   File No.33-
                                            19367, filed with the Securities and
                                            Exchange Commission on May 2, 1988

                           10.3 *           The Palmetto Bank Officer  Incentive
                                            Compensation Plan

                           10.4 *           Palmetto Bancshares, Inc. 1997 Stock
                                            Compensation   Plan,   as amended to
                                            date: Incorporated  by reference  to
                                            Exhibit 10.1  to  the Company's 1997
                                            Annual Report  on  Form  10-K, filed
                                            with the   Securities   and Exchange
                                            Commission on March 23, 1998

                           10.4.1 * +       Amendment     to    the     Palmetto
                                            Bancshares,   Inc's   1997     Stock
                                            Compensation Plan. Approved  by  the
                                            Company's Board   of   Directors  on

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                                            January 21,   2003   and   by    the
                                            Company's shareholders on  April 15,
                                            2003

                           21.1 +           List   of   Subsidiaries    of   the
                                            Registrant

                           23.1 ^           Consent of Elliott Davis, LLC

                           31.1 ^           L. Leon Patterson's    Certification
                                            Pursuant   to   Section   302 of the
                                            Sarbanes-Oxley Act of 2002

                           31.2 ^           Paul  W.  Stringer's   Certification
                                            Pursuant   to   Section   302 of the
                                            Sarbanes-Oxley Act of 2002

                           32 ^             Certifications  Pursuant  to Section
                                            906  of  the  Sarbanes-Oxley  Act of
                                            2002

         * Management  contract or compensatory plan or arrangement
         + Previously filed with the Annual  Report on Form 10-K filed March 15,
           2004
         ^ Filed with this Form 10-K/A

         (b) Reports on Form 8-K

                  On October 17, 2003,  the Company filed a Form 8-K  announcing
                  the earnings  release dated October 10, 2003,  which  included
                  selected  financial  data for the quarter ended  September 30,
                  2003 and for select other previously reported periods.

                  On November 6, 2003,  the Company filed a Form 8-K  announcing
                  the mailing of its quarterly earnings overview to shareholders
                  dated November 3, 2003, which included selected financial data
                  for the quarter ended  September 30, 2003 and for select other
                  previously reported periods.

                  On January 13, 2004,  the Company filed a Form 8-K  announcing
                  the earnings  release  dated January 8, 2004,  which  included
                  selected  financial  data for the quarter  ended  December 31,
                  2003 and for select other previously reported periods.

<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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, Palmetto Bancshares, Inc.


/s/ Paul W. Stringer
--------------------------------
Paul W. Stringer
Chairman and Chief Executive Officer, The Palmetto Bank
Chief Accounting Officer


Date: March 29, 2004


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                                  EXHIBIT INDEX

              Exhibit No.      Description
              -----------      -----------

              23.1           Consent of Elliott Davis, LLC

              31.1           L. Leon  Patterson's  Certification   Pursuant   to
                             Section 302 of the Sarbanes-Oxley Act of 2002

              31.2           Paul W.  Stringer's  Certification   Pursuant    to
                             Section 302 of the Sarbanes-Oxley Act of 2002

              32             Certifications   Pursuant   to   Section 906 of the
                             Sarbanes-Oxley Act of 2002