Increased earnings

Leon Patterson, chairman and chief executive officer of Palmetto Bancshares, Inc., parent company for The Palmetto Bank, today announced that net income for the third quarter of 2008 was $4.057 million, a 4.2% increase over $3.896 million reported the same period in 2007. Net income per diluted share was $.62, a 3.3% increase over $.60 per share reported in the third quarter of 2007.

For the nine months ended September 30, 2008, reported net income was $12.032 million compared to $11.722 million reported the same period of 2007, an increase of 2.7%. Diluted earnings per share were $1.84, as compared with $1.81 per share when comparing the same periods.

Total assets at September 30, 2008 grew 13.9% to $1.354 billion, an increase of $165.4 million over the same period in 2007. At September 30, 2008, loans increased $127.2 million to $1.135 billion, while deposits also rose to $1.116 billion, an increase of $78.3 million from September 30, 2007.