UPDATE 1-Columbia Banking sees Q2 loss on higher provision

* Sees Q2 loss per share $0.37 to $0.43

* Sees Q2 provision of about $21 million

June 12 (Reuters) - Columbia Banking System Inc (COLB.O) said it expects to post a second-quarter loss in the range of 37 cents to 43 cents a share hurt by higher provision for loan losses.

The bank holding company said it will set aside $21 million as provision for loan losses in the quarter citing continued decline in real estate values.

Analysts expect a second-quarter loss of 6 cents a share, excluding items, according to Reuters Estimates.

Columbia also said it expects its provision for loan losses for remainder of the year to remain at elevated levels compared with previous periods.

The higher provision was due to continued decline in residential real estate values, particularly relating to residential land and a single non-performing commercial real estate construction loan, Columbia added.

The U.S. housing market is in the worst downturn since the Great Depression as a huge supply of unsold homes, tighter lending standards and record foreclosures push down prices.

Nonperforming assets will be in the range of $130 million to $140 million in the quarter, the company said.