SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* CapGen Capital Group V LP (Last) (First) (Middle) C/O CAPGEN CAPITAL GROUP V LP 280 PARK AVE, 40TH FLOOR WEST, SUITE 401 (Street) NEW YORK NY 10017 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol PALMETTO BANCSHARES INC [ PLMT ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X Director X 10% Owner Officer (give title below) X Other (specify below) See Remarks
	3. Date of Earliest Transaction (Month/Day/Year) 01/28/2011
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock, par value $0.01 per share	01/28/2011		P		1,721,490(1)	A	$2.6	22,875,336(2)	D
Common Stock, par value $0.01 per share	01/28/2011		P		1,721,490(1)	A	$2.6	22,875,336(3)(4)(5)(6)	I	Held by CapGen Capital Group V LP

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

1. Name and Address of Reporting Person* CapGen Capital Group V LP (Last) (First) (Middle) C/O CAPGEN CAPITAL GROUP V LP 280 PARK AVE, 40TH FLOOR WEST, SUITE 401 (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director X 10% Owner Officer (give title below) X Other (specify below) See Remarks

1. Name and Address of Reporting Person* CapGen Capital Group V LLC (Last) (First) (Middle) 280 PARK AVENUE 40TH FLOOR SUITE 401 (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director X 10% Owner Officer (give title below) X Other (specify below) See Remarks

1. Name and Address of Reporting Person* GOLDSTEIN ROBERT (Last) (First) (Middle) C/O CAPGEN CAPITAL GROUP V LP 280 PARK AVE, 40TH FLOOR WEST, SUITE 401 (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Sullivan John R (Last) (First) (Middle) C/O CAPGEN CAPITAL GROUP V LP 280 PARK AVE, 40TH FLOOR WEST, SUITE 401 (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Ludwig Eugene (Last) (First) (Middle) 280 PARK AVENUE 40TH FLOOR WEST, SUITE 401 (Street) NEW YORK NY 10017 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer X Director X 10% Owner Officer (give title below) X Other (specify below) See Remarks

Explanation of Responses:

1. On January 28, 2011, CapGen Capital Group V LP ("CapGen LP") agreed to purchase an additional 1,721,846 shares of common stock, par value $0.01 per share (the "Common Stock") of Palmetto Bancshares, Inc. (the "Issuer") in two installments. On January 31, 2011, CapGen LP will purchase 846,153 shares of Common Stock for an aggregate purchase price of $2,200,000. On February 11, 2011, CapGen LP will purchase the remaining 875,537 shares of Common Stock for an aggregate purchase price of $2,275,000.

2. CapGen LP directly owns the shares of Common Stock on this row.

3. As the sole general partner of CapGen LP, CapGen Capital Group V LLC ("CapGen LLC") may be deemed to be the indirect beneficial owner of such shares under Rule 16a-1(a)(2) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Pursuant to Rule 16a-1(a)(4) promulgated under the Exchange Act, CapGen LLC disclaims that it is the beneficial owner of such shares, except to the extent of its pecuniary interest.

4. As the managing member of CapGen LLC, Mr. Ludwig may be deemed to be the indirect beneficial owner of such shares under Rule 16a-1(a)(2) promulgated under the Exchange Act. Pursuant to Rule 16a-1(a)(4) promulgated under the Exchange Act, Mr. Ludwig disclaims that he is the beneficial owner of such shares, except to the extent of his pecuniary interest.

5. As a principal member and member of the investment committee of CapGen LLC, the general partner of CapGen LP, Mr. Goldstein may be deemed to be the indirect beneficial owner of such shares under Rule 16a-1(a)(2) promulgated under the Exchange Act. Pursuant to Rule 16a-1(a)(4) promulgated under the Exchange Act, Mr. Goldstein disclaims that he is the beneficial owner of such shares, except to the extent of his pecuniary interest.

6. As a member of the investment committee of CapGen LLC, the general partner of CapGen LP, Mr. Sullivan may be deemed to be the indirect beneficial owner of such shares under Rule 16a-1(a)(2) promulgated under the Exchange Act. Pursuant to Rule 16a-1(a)(4) promulgated under the Exchange Act, Mr. Sullivan disclaims that he is the beneficial owner of such shares, except to the extent of his pecuniary interest.

Remarks:

On October 12, 2010, the Issuer appointed Messrs. Robert Goldstein and John Sullivan to the board of directors. CapGen LP, CapGen LLC and Mr. Ludwig disclaim their status as directors by deputization by virtue of Messrs. Goldstein's and Sullivan's positions as members of the board of directors of the Issuer.

	/s/ Robert B. Goldstein	02/01/2011
	/s/ John R. Sullivan	02/01/2011
	/s/ Eugene A. Ludwig	02/01/2011
	/s/ Eugene A. Ludwig, as the managing member of CAPGEN CAPITAL GROUP V LLC, the general partner of CAPGEN CAPITAL GROUP V LP, the managing principal of CAPGEN CAPITAL ADVISORS LLC	02/01/2011
	** Signature of Reporting Person	Date
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