UPDATE 1-Columbia Bancorp Q3 loss wider than expected

* Q3 loss wider than estimates

* Suspends dividend

Oct 31 (Reuters) - Columbia Bancorp (CBBO.O), posted a wider-than-expected third-quarter loss, hurt by a 32-fold rise in provision for loan losses, and suspended its dividend for the current and near-term quarters to preserve capital.

"Our large loan loss provision in the third quarter relates predominantly to our concentration in residential development projects in two of our markets -- Central Oregon and the Portland/Vancouver metropolitan area," Chief Executive Terry Cochran said in a statement.

The holding company for Columbia River Bank said non-performing loans rose more than seven-fold to $68.9 million during the period.

The dividend suspension is the latest in a series of steps taken by the company, following a surge in problem loans and increased provisions, as it strives to cut costs amid a difficult mortgage market.

In September the company said it plans to close its mortgage banking division, affecting about 39 jobs. And in July, the bank suspended payment of director's fees for the remainder of 2008 and slashed its dividend by 90 percent to 1 cent a share.

Shares of Dalles, Oregon-based Columbia Bancorp closed at $4.02 Thursday on Nasdaq.

For the alerts, please double-click [ID:nWNAB5718] . For the press release, double-click [ID:nPnAQF014a] . (Reporting by Anurag Kotoky in Bangalore; Editing by Pratish Narayanan)