Major banks increasingly are relying on noncore funding to support loans, says Smith Barney Inc. analyst Henry C. Dickson, and that does not bode well for growth and profitability trends.

In a recent report, Mr. Dickson said that at Sept. 30, 16 of the 29 regional banks he covers were funding less than 100% of loans with comparatively cheaper core liabilities such as demand deposits and domestic certificates of deposit under $100,000.

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