13.

INCOME TAXES

Significant components of the deferred tax assets and liabilities are as follows:

	September 30,		December 31,
	2016		2015
	(Dollars in thousands)
Deferred tax assets:
Loan loss reserves	$	6,382	$	6,199
Postretirement benefits		104		564
Depreciation		742		611
Other real estate owned valuation		351		430
Tax credits carryforward		1,416		951
Unrealized loss on securities available for sale		—		1,341
Unrealized loss on securities held to maturity		454		517
Interest on nonaccrual loans		978		834
Net operating loss carryforward		10,817		16,903
Purchase accounting adjustment		89		90
Accrued bonuses		799		723
Other		59		50
Deferred tax assets		22,191		29,213
Deferred tax liabilities:
Deferred loan fees		1,002		510
Federal Home Loan Bank stock dividends		4,585		4,585
Mortgage servicing rights		1,839		1,976
FHLB prepayment penalty		854		1,059
Unrealized gains on securities available for sale		3,775		—
Postretirement benefits accrual		97		447
Prepaid expenses		155		215
Deferred tax liabilities		12,307		8,792
Net deferred tax asset	$	9,884	$	20,421

As of September 30, 2016, the net DTA was $9.9 million, and as of December 31, 2015, the net DTA was $20.4 million.

The Company’s ultimate realization of the DTA is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the nature and amount of historical and projected future taxable income, the scheduled reversal of deferred tax assets and liabilities, and available tax planning strategies in making this assessment. The amount of deferred taxes recognized could be impacted by changes to any of these variables.

United Community’s net operating loss of $30.9 million at September 30, 2016 will be carried forward to use against future taxable income. The net operating loss carryforwards begin to expire in the year ending December 31, 2030. In addition, United Community is carrying forward $1.4 million of alternative minimum tax credits. The alternative minimum tax credits are carried forward indefinitely.