** Brokerage KBW says investors will likely be disappointed in the slower-than-expected progress in Warren Buffett's Berkshire Hathaway BRKa.N selling down its stake in Bank of America BAC.N, as it continues to represent a hangover on the stock

** Berkshire late Friday disclosed it had cut its BofA stake by ~15% to 680.2 million shares, leaving the conglomerate with a 8.9% stake in the second-largest U.S. lender as of December 31

** Buffett's Berkshire has reduced its BofA stake by one-third since July, when it held 1.03 billion shares

** KBW says Berkshire's slowing selling pace despite higher BofA stock price creates uncertainty around the conglomerate's longer-term strategy

** Says Berkshire's disclosure shows a nearly 57% decline in the estimated pace of sales by the company since the selling spree started back in July

** BofA stock has underperformed rivals JPMorgan Chase JPM.N, Wells Fargo WFC.N, and Citigroup C.N in the past three months

** Investors were curious if the stock underperformance was due to selling pressure from Berkshire, analysts had said ahead of the conglomerate's regulatory filing

** Continue to like BAC's stock owing to strength in a higher-for-longer interest rate scenario - KBW

(Reporting by Arasu Kannagi Basil in Bengaluru)

((ArasuKannagi.Basil@thomsonreuters.com;))