Broadway Asset Management, a holding company created by Synovus Financial Corp. last quarter, will isolate troubled property on the company's balance sheet and eventually sell it, the company's top executives said last week.

"What you've accomplished from this is two things: removing the distraction from the local bankers and, secondly, putting these assets into the direct hands of professional asset managers," said Tommy Prescott, Synovus' chief financial officer in an interview. "We don't want to be in the real estate business. We want to be in the banking business."

But the Columbus, Ga., company's top executives are not promising a quick fix, given the state of the housing market.

Synovus chief executive Richard Anthony said in the company's earnings conference call Thursday that some of the assets may still be on Broadway's books "two or maybe even three years down the road."

Broadway currently holds property valued at $500 million. Synovus unveiled the unit Thursday when it also announced a fourth-quarter loss of $637 million. A year earlier the company had reported an $81.9 million profit.

The $35.7 billion-asset company, like other regional players, has been hit hard by mounting losses in its residential loan portfolio. It said net chargeoffs in the fourth quarter rose 118% from the third quarter and 283% from a year earlier, to $229.4 million. Nonperforming assets rose 17.2% from the third quarter and 164% from a year earlier, to $1.17 billion.

One other company has announced plans for a special entity without regulatory help. In March, BankAtlantic Bancorp Inc. in Fort Lauderdale, Fla., announced plans to establish a subsidiary that would acquire and hold the parent's nonaccruing loans.

At Synovus, the assets include about $300 million to $325 million of undeveloped lots and land and about $150 million to $175 million of foreclosed houses in Atlanta and Florida, Mr. Prescott said. Synovus transferred ownership of the properties from seven of its 31 banks to Broadway.

The entity employs 31 special asset managers working for veteran Synovus executive John Creech, Mr. Prescott said. The houses will be unloaded first, through auctions, bulk sales, and one-off sales, he said. They take priority because they are subject to special taxes and quick to depreciate in value.

Anthony Davis, an analyst at Stifel, Nicolaus & Co., applauded Synovus for segregating the assets. He added, however, "The issue here is how much of a haircut are they going to have to take as they dispose of these assets over the next several quarters."

"The discounts are going to be definitely wider than the 25% writedown that they have taken on nonperforming loans to date," he said.

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