<PAGE>
 
                                  FORM 10-K/A
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
(Mark One)

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended September 30, 1996

                                 OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                  to 
                               ----------------     ---------------- 
 
Commission file number        0-18932
                        ---------------------
 
                     FIRST PALMETTO FINANCIAL CORPORATION
                     ------------------------------------
            (Exact name of registrant as specified in its charter)

           Delaware                                    57-0921284
-------------------------------         ---------------------------------------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)
 
407 DeKalb Street, Camden, South Carolina                29020
----------------------------------------               ----------
(Address of principal executive offices)               (Zip Code)


     Registrant's telephone number, including area code:  (803) 432-1416.

      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 $.01 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 this Form 10-K or any amendment to this
Form 10-K.  [x]

The registrant's voting stock is not regularly and actively traded in any
established market, and there are no regularly quoted bid and asked prices for
the registrant's voting stock.  As of November 1, 1996, the aggregate market
value of the voting stock held by non-affiliates of the registrant, computed by
reference to the most recent privately negotiated sales prices known to
management, was approximately $13.4 million (406,514 shares at $33.00 per
share).  It is assumed, for purposes of this calculation, that all of the
registrant's directors and executive officers and all stockholders beneficially
owning more than 10% of the registrant's Common Stock are affiliates of the
registrant.

As of November 1, 1996, there were issued and outstanding 693,010 shares of the
registrant's common stock.

                      Documents Incorporated By Reference
Part II:
Annual Report to Stockholders for the year ended September 30, 1996.
<PAGE>
 
                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

<TABLE>
<CAPTION>
 
                                                               Year
                                                               First      Year
                                                              Elected     Term
                             Age  Position(s) Held          Director(1)  Expires
                             ---  ----------------          -----------  -------
<S>                          <C>  <C>                       <C>          <C>
 
Samuel R. Small               49  President and Chief           1980        1997
                                  Executive Officer of
                                  First Palmetto and
                                  Chairman of the Board,
                                  President and Chief
                                  Executive Officer of
                                  the Bank
 
Pierce W. Cantey, Jr.         56  Director                      1996        1997
 
William R. Clyburn            60  Director                      1968        1997
 
James L. Creed                71  Director                      1970        1997
 
Charlie E. Nash               55  Director                      1983        1997
 
H. Davis Green, Jr.           59  Chairman of the Board of      1970        1998
                                  First Palmetto
 
Steve G. Williams, Jr.        40  Senior Vice President         1989        1998
                                  and Treasurer of
                                  First Palmetto and Senior
                                  Vice President Regulatory
                                  Administration/ 
                                  Communications of the Bank
 
Donald H. Holland             68  Director                      1971        1998
 
Glenn G. Tucker               47  Director                      1980        1998
 
Frank D. Goodale, Jr.         63  Director                      1979        1999
 
</TABLE>
__________
(1) Year first elected as director of Palmetto State Savings Bank of South
    Carolina ("Palmetto State") or First Federal Savings and Loan Association of
    Camden ("First Federal"), the predecessors of First Palmetto Savings Bank,
    F.S.B. (the "Bank"), First Palmetto's wholly-owned subsidiary.


                                       2
<PAGE>
 
     The principal occupations and business experience for the past five years
of each director and executive officers of First Palmetto is set forth below.

     Samuel R. Small has been President and Chief Executive Officer of First
Palmetto and Chief Executive Officer of the Bank since First Federal merged with
First Palmetto in October 1990.  In October 1991, he became Chairman of the
Board of the Bank.  Previously, he had served as Vice Chairman of the Board of
the Bank.  Prior to the merger of First Federal and First Palmetto, Mr. Small
served at various times as Executive Vice President, President, Chief Operating
Officer and Chief Executive Officer of First Federal.

     Pierce W. Cantey, Jr. is the managing partner of Carswell, Cantey, Burch
and Associates, LLP.

     William R. Clyburn is the retired general manager of H&H Chevrolet.  He is
the President of Bill Clyburn Realty, Inc.

     James L. Creed is retired.  Previously, he was employed by D.J. Creed,
Inc., a timber company in Camden.

     Charlie Nash is President of Charlie E. Nash Insurance Agency, Inc. in
Camden.

     H. Davis Green, Jr. is an appraiser and the owner of H. Davis Green, Jr.
Appraisals in Camden.  Mr. Green has been Chairman of the Board of First
Palmetto since October 1991.  Previously, he had been Vice Chairman of the Board
of First Palmetto since First Federal merged with First Palmetto in October
1990.  Prior to that, he served at various times as President, Chief Executive
Officer and Chairman of the Board of First Federal.

     Steve G. Williams, Jr. has been Senior Vice President and Treasurer of
First Palmetto and Senior Vice President, Treasurer and Chief Financial Officer
of First Palmetto since Palmetto State converted into First Palmetto and First
Federal merged with First Palmetto in October 1990.  Previously, Mr. Williams
served at various times as Treasurer of First Palmetto and Vice President,
Senior Vice President and Treasurer of Palmetto State.

     Donald H. Holland is a partner in the law firm of Holland, DuBose and
Cushman in Camden.  He has served as a South Carolina State Senator since 1969.

     Glenn G. Tucker is the co-publisher of the Chronicle-Independent in Camden.

     Frank D. Goodale, Jr. is a jeweler and owner of F. D. Goodale, a jewelry
retailer in Camden.

Directors Emeritus

     H.B. Marshall, Jr. is self-employed by a life insurance company affiliated
with the New York Life Insurance Company.

     Austin Sheheen, Sr. is a retired business executive.  Previously Mr.
Sheheen was President of Sheheen Texaco, Inc., a petroleum distributorship in
Camden.

     William F. Tripp, Jr. is a retired plant manager of the E.I. DuPont de
Nemours Textile Fibers Plant in Camden.

                                       3
<PAGE>
 
Item 11.  Executive Compensation

     The following table sets forth cash and noncash compensation awarded to or
earned by the Chief Executive Officer of First Palmetto during fiscal 1996, 1995
and 1994.
<TABLE>
<CAPTION>
 
                                                    SUMMARY COMPENSATION TABLE

 -----------------------------------------------------------------------------------------------------------------------------------

                                Annual Compensation                                 Long-Term Compensation
                             ------------------------------------------------------------------------------------
                                                                                    Awards               Payouts
                                                                           --------------------------------------
                                                               Other
                                                               Annual      Restricted      Securities               All Other
                                                               Compen-     Stock           Underlying     LTIP      Compen-
Name and                        Salary                Bonus    sation (2)  Awards(s)       Options/SARs   Payouts   sation (3)
Principal Position (1)    Year  ($)                   ($)      ($)         ($)                (#)            ($)       ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>   <C>                   <C>      <C>         <C>             <C>            <C>       <C> 
Samuel R. Small           1996   160,000                  --          --         --           --  (4)       --       8,400
  President and Chief     1995   120,000               5,800          --         --               --        --       6,000
  Executive Officer       1994   120,000              20,000          --         --               --        --       6,000
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  No other executive officer earned in excess of $100,000 in salary and bonus
     in fiscal 1996, 1995 and 1994.

(2)  Executive officers of First Palmetto receive indirect compensation in the
     form of certain perquisites and other personal benefits.  The amount of
     such benefits in fiscal 1996, 1995 and 1994 by the named executive officer
     did not exceed 10% of the executive's annual salary and bonus.

(3)  Represents director's fees for each of fiscal 1996, 1995 and 1994.

(4)  No options were granted or outstanding during fiscal 1996.

Directors' Compensation

     During fiscal 1996, each director of the Bank received an annual fee of
$8,400.  Non-employee directors also receive a fee of $100 per committee meeting
attended.

Report of the Compensation Committee

     As members of the Compensation Committee of the Bank, it is our duty to
review compensation policies applicable to executive officers; to consider the
relationship of corporate performance to that compensation; to recommend salary
and bonus levels for executive officers for consideration by the Board of
Directors of the Bank; and to administer various incentive plans of the Company
and the Bank.

     Overview.  Under the compensation policies of the Bank, which are endorsed
by the Compensation Committee, compensation is paid based both on the executive
officer's performance and the performance of the entire Company.  In assessing
the performance of the Company and the Bank for purposes of compensation
decisions, the Compensation Committee considers a number of factors, including
profits of the Company and the Bank during the past year relative to their
profit plans, changes in the value of the Company's stock, reports of federal
regulatory examinations of the Company and the Bank, growth, business plans for
future periods, and regulatory capital levels.  The Compensation Committee
assesses individual executive performance based upon its determination of the
officer's contributions to the performance of the Company and the Bank and the
accomplishment of the Company's and the Bank's strategic goals.  In assessing
performance for the year ended September 30, 1996 and previous years, the
members of the Committee did not make use of a mechanical

                                       4
<PAGE>
 
weighting formula or use specific performance targets, but instead weighed the
described factors as they deemed appropriate in the total circumstances.

     Base Salary.  The 1996 salary levels of First Palmetto's senior officers
were established in 1995 consistent with this compensation policy.  In its 1995
review of base compensation, the Committee determined that the performance of
Mr. Small in managing First Palmetto and the Bank was satisfactory, based upon
the 1995 financial performance of the Corporation, including the growth in
assets, income, and capitalization during 1995; the financial performance trends
for 1995 and the preceding four years, which included growth in assets, net
income, and stockholders' equity in each year; the results of confidential
regulatory examinations; his continued involvement in community affairs in the
communities served by the Bank; the Corporation's planned levels of financial
performance for 1996; and a general level of satisfaction with the management of
First Palmetto and the Bank.  Based upon the results of this review, the salary
of Mr. Small was established at $160,000 per year for 1996, which represented an
increase of 33% over his 1995 base salary.  This increase represented the first
increase to Samuel R. Small since 1991.

     No member of the Compensation Committee is a former or current officer or
employee of the Corporation or the Bank.


January 28, 1997

                              H. Davis Green
 
                              Donald H. Holland
 
                              Charlie E. Nash

                              Glenn G. Tucker

                                       5
<PAGE>
 
Stock Performance Comparisons

     The following graph shows the cumulative total return on the Common Stock
of First Palmetto over the last five years, compared with the S & P 500 Index
and a portfolio of all publicly traded thrifts and thrift holding companies.
Cumulative total return on the stock or the index equals the total increase in
value since September 30, 1991 assuming reinvestment of all dividends paid into
the stock or the index, respectively.  The graph was prepared assuming that $100
was invested on September 30, 1991 in the Common Stock, and the securities
included in the indexes.  There is not an established public trading market for
the Common Stock.



                      CUMULATIVE TOTAL SHAREHOLDER RETURN
                 COMPARED WITH PERFORMANCE OF SELECTED INDEXES
                 September 30, 1991 through September 30, 1996

<TABLE> 
<CAPTION> 
                                         Period Ending
                          ----------------------------------------------------------
Index                      9/30/91   9/30/92   9/30/93   9/30/94   9/30/95   9/30/96
------------------------------------------------------------------------------------
<S>                        <C>       <C>       <C>       <C>       <C>       <C> 
First Palmetto Financial
 Corp                       100.00    117.94    137.18    187.81    193.96    248.55
S&P 500                     100.00    111.05    125.49    130.11    168.82    203.13
Thrifts (All)               100.00    118.61    184.46    202.28    264.90    319.95
</TABLE> 

                                       6
<PAGE>
 
Item 12.  Security Ownership of Certain Beneficial Owners and Management.

Security Ownership of Certain Beneficial Owners

  The following table sets forth information as of September 30, 1996 with
respect to the persons believed by First Palmetto to be the beneficial owners of
more than five percent of the outstanding shares of Common Stock.  This
information is based upon the most recent Schedule 13D filed by such persons
with the Securities and Exchange Commission or information provided to First
Palmetto by such persons.

<TABLE>
<CAPTION>
                                                        Percent
Name and Address          Amount and Nature of      of Common Stock
of Beneficial Owner       Beneficial Ownership (1)    Outstanding
-------------------       ------------------------  ----------------
<S>                       <C>                       <C>
 
Samuel R. Small                    81,660                11.78%
407 DeKalb Street
Camden, South Carolina
 
Glenn G. Tucker                    51,857                 7.48%
1510 Lytleton Street
Camden, South Carolina
</TABLE> 


------------
(1)  For the definition of beneficial ownership and additional information with
     respect to the nature of the beneficial ownership, see footnote (1) to the
     table in "Stock Ownership of Management" below.


Security Ownership of Management

     The following table sets forth information as of September 30, 1996, with
respect to the shares of Common Stock beneficially owned by each director of
First Palmetto and by all directors and executive officers and the director
emeritus of First Palmetto as a group.  This information is based on information
furnished to First Palmetto by such persons.
<TABLE>
<CAPTION>
 
                                        Amount and Nature    Percent of
                                          of Beneficial     Common Stock
                                          Ownership (1)      Outstanding
                                        ------------------  -------------
<S>                                     <C>                 <C>
 
Directors:
  Pierce W. Cantey, Jr.                       25,274            3.65%
  William R. Clyburn                           6,500             .94
  James L. Creed                              32,566            4.70
  Frank D. Goodale, Jr.                        6,140             .89
  H. Davis Green, Jr.                         26,399            3.81
  Donald H. Holland                           11,300            1.63
  Charlie E. Nash                             14,221            2.05
  Samuel R. Small                             81,660           11.78
  Glenn G. Tucker                             51,857            7.48
  Steve G. Williams, Jr.                      30,579            4.41
 
All Directors and Executive Officers
 as a Group (11 persons)                     286,496           41.34
</TABLE>

                                                      Footnote on following page

                                       7
<PAGE>
 
--------------
(1)  In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, a
     person is considered the  beneficial owner of any shares of Common Stock
     (a) over which he has or shares voting or investment power or (b) of which
     he has the right to acquire beneficial ownership at any time within 60 days
     of September 30, 1996.  As used herein, "voting power" is the power to vote
     or direct the vote of shares, and "investment power" is the power to
     dispose or direct the disposition of shares.  This table includes shares
     owned directly by directors and officers of First Palmetto as well as
     shares held by their spouses and minor children and trusts of which certain
     of them are trustees, but does not include shares held or beneficially
     owned by other relatives as to which they disclaim beneficial ownership.


Item 13.  Certain Relationships and Related Transactions

     First Palmetto and the Bank have had, and expect to have in the future,
transactions in the ordinary course of business with directors and executive
officers and members of their immediate families, as well as with principal
stockholders.  All loans included in such transactions were made in the ordinary
course of business, on substantially the same terms, including interest rates
and collateral, as those prevailing for comparable transactions with non-
affiliated persons.  It is the belief of management that such loans neither
involved more than the normal risk of collectibility nor presented other
unfavorable features.

                                       8
<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
behalf of the undersigned, thereunto duly authorized.


                                   FIRST PALMETTO FINANCIAL CORPORATION



Date:  January 28, 1997            By: /s/ Samuel R. Small                   
                                       -------------------                   
                                       Samuel R. Small                       
                                        President and Chief Executive Officer
                                        (Duly Authorized Representative)      

                                       9