Bank of America and Berkowitz Follow Different Scripts: Street Whispers

NEW YORK ( TheStreet) -- Bank of America ( BAC)'s number one fan, Fairholme Funds president Bruce Berkowitz, just upped his stake once again, so it is worth wondering why Berkowitz's statements about the company don't quite jibe with those of management.

Fairholme's third quarter 13F filings with the Securities and Exchange Commission show the former Morningstar Manager of the Decade bought an additional 500,000 shares of Bank of America, raising his total to roughly $102.2 million. While it isn't much of an increase, Bank of America was one of just a small number of companies where Berkowitz added to his holdings during the quarter.

In a letter to shareholders in July, Berkowitz emphasized Bank of America as a play on a housing turnaround and a U.S. consumer recovery. He didn't say very much in the letter, so what he did say is worth quoting in full.

"Bank of America is the Fund's next largest financial holding (9% of the Fund) affected by the great housing price collapse. The company's reported book value is over $20 per share. We believe that America's bank is returning to its retail roots (think of Wells Fargo ( WFC)) with a $1 trillion deposit franchise and that bank profits will skyrocket as legacy real estate loans burn-off," Berkowitz wrote.

Berkowitz goes into more detail about his bullish Bank of America thesis in a Feb. 2012 presentation on his fund's website, but once again the focus appears to be largely on the company's U.S. consumer business.

By contrast, Bank of America CEO Brian Moynihan spent relatively little time at a conference his bank hosted this week talking about growing the consumer business. He discussed cost cutting, investment banking, trading and foreign opportunities, while detailing his plans to reduce his mortgage servicing footprint.

Moynihan claims Bank of America reorganized its businesses "to be more focused on the customer as opposed to products," but it isn't entirely clear what that means. It may be an allusion to the fact that the bank has been selling its foreign credit card operations and much of mortgage servicing business while shuttering its correspondent mortgage operations (buying mortgages originated by other banks). But just because Bank of America is offering fewer products doesn't mean it is "more focused on the customer as opposed to products." As longtime shareholder Jonathan Finger recently observed Bank of America's reputation with consumers is quite poor, and management seems to have little interest in turning it around or awareness of the issue.

Then again it may not matter. Banking customers will put up with lots of abuse. People don't change banks the way they change restaurants or clothing brands. Once you're set up with direct deposit and automatic bill pay, it takes a lot of energy to bring your business elsewhere, and as Bank of America (and Berkowitz) love to repeat, the bank serves one of every two U.S. households.

Still, however attractive Bank of America may be as a play on a U.S. recovery, imagine how well it could do if it actually had a coherent game plan.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.