Synovus lost $637 million in fourth quarter

Synovus, Georgia’s second-biggest bank, tumbled into the red during the fourth quarter, posting a $637 million loss, or $1.93 per share, amid a rising tide of bad loans tied to the troubled housing market.

The Columbus-based company said Thursday it has written off more than $229 million in loans as non-performing and boosted its provision for future loan losses by $134 million.

The loss also includes a one-time $443 million write-down of the company’s goodwill — intangible assets, such as the strength of a brand name, that add value above a company’s book value.

The company’s performance did not meet the expectations of analysts, who were projecting a loss of about 49 cents per share. Excluding the goodwill charge, the company would have lost $195 million, or 59 cents per share.

Richard Anthony, Synovus’ chairman and CEO, said the bank’s portfolio of residential construction and development loans continued to weaken, particularly in the hard-hit Atlanta market.

“We are taking steps to recognize and liquidate these non-performing credits as efficiently and as economically as possible,” he said.

In a conference call with analysts, Anthony said the bank has created a subsidiary to house bad assets and dispose of them. Synovus has transferred $550 million in non-performing loans to the new entity, called Broadway Asset Management, from seven of its 31 banks.

“This will relieve pressure on those banks, create a better, more productive focus” for those banks, he said. “It creates a better set of credit metrics and better allows our bankers to be bankers.”

Synovus received a $968 million investment from the federal government in December as part of the U.S. Treasury’s effort to stabilize the battered banking industry. The funds helped strengthen Synovus’ capital levels, which Anthony said helps position the bank for the future.

For the year, Synovus reported a loss of $584 million, or $1.77 per share, compared to a profit of $343 million, or $1.04 per share, in 2007.

Synovus’ problems remain rooted in the metro Atlanta real estate market, which accounts for nearly half of the bank’s non-performing loans in its residential construction and development portfolio, according to a company news release.

The bank’s ratio of non-performing assets to total loans stood at 4.16 percent in the fourth quarter, compared to 3.58 percent in the third quarter. The bank’s pool of non-performing loans increased by $152 million in the fourth quarter to $922 million.

Synovus is known for buying smaller community banks and allowing them to maintain their names and operate somewhat independently. In metro Atlanta, Synovus owns the Bank of North Georgia and the Bank of Coweta.