A harpist in a black gown plucks her way through "Theme from The Thorn Birds," mellow accompaniment for visitors studying a new exhibit of watercolors depicting scenes from Antarctica, Kenya, and the Galapagos Islands.

Your typical Manhattan art gallery opening? No, your atypical bank lobby in Atlanta. It's the headquarters of Paces Bank and Trust, whose well-heeled clients are getting a preview of an exhibit by local artist Alan Campbell.

The $14.3 million-asset bank, chartered two years ago, sponsors at least one art exhibit a quarter to enhance its image as an upscale, private bank.

Bringing in Prospects

"We think it's an effective marketing tool for us," said chairman and chief executive Peter H. Isop, noting that the exhibits draw potential as well as current clients.

Paces began life in December 1989 as a "women's bank," and it is still 52% owned by women.

But like its prototype in New York - the former First Women's Bank of New York that has transformed itself into First New York Bank for Business - the Georgia institution has changed its focus.

Since Paces was located in an affluent Atlanta neighborhood, Mr. Isop decided to deemphasize gender and focus on upscale individuals and the small businesses that many own.

Turnaround Tactic

It was a mandatory decision for Mr. Isop, 53, who formerly was an executive vice president of corporate banking at C&S/Sovran Corp.

When he joined Paces in September 1990 from the Atlanta-based superregional, growth was behind plan, and the small bank's executive suite was in turmoil.

(The former president now reports to Mr. Isop, and another executive, who was hired from Banque Indosuez, has sued Paces, charging wrongful dismissal.)

Not for Women Only

Mr. Isop, who bridles at the term "women's bank," said Paces never intended to attract female customers only.

But in a city where about 50 banks have been founded since the mid-1980s, he said, it was essential for Paces to maintain a niche to distinguish itself.

Print, radio, and television advertising are prohibitively expensive for a $14 million bank, so he began inviting artists in to lure prospective customers and gain recognition.

The current exhibition features Mr. Campbell, a 41-year-old native of Athens, Ga., who got a National Science Foundation grant in 1987 to spend three months painting in Antartica.

Mr. Campbell said his bank connections go back to 1977, when a small bank in Moultrie, Ga., commissioned a series of paintings about the town and helped launch his career.

He said he likes Paces because upscale bank customers "are the kind of people that art galleries here in Atlanta would be trying to get coming to their art openings."

Mr. Isop said Paces has obtained some new business through the art exhibitions, though he does not precisely calculate the benefit.

He also is savvy about the art gimmick, saying that it will lose its effectiveness over time, as does any advertising campaign. Thus, his next ploy.

When the Campbell exhibition ends in February, Mr. Isop will launch a series of seminars for small businesses, bringing in experts to speak on taxes, leasing, succession planning, and other topics.

For Mr. Isop, of course, bringing in new business is a priority. Though Paces nearly doubled its loan volume in 1991, the bank has not yet turned a profit.

At the end of the third quarter, it had $8.2 million of loans and about $10.8 million of deposits.

Being Different Helps

The bank retains its special status - six of nine directors are women - which helps it draw deposits from some government and corporate entities.

For example, a bank official said, Chrysler Corp. and Burger King Corp. own certificates of deposit issued by the bank. Burger King is a subsidiary of Pillsbury Co.

Mr. Isop estimated that Paces has lost $2 million since it opened, including $666,000 in the first three quarters of this year.

Difficult Prospect

Pace must make about $10 million of additional loans to inch into the black, he said.

That's a tough prospect, considering the slow national and local economies, which have dampened loan demand.

"You tell me when the economy is going to recover, and I'll tell you when we'll be in the black," Mr. Isop said.

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