Warren Buffett took a chance on Bank of America and it is about to pay off to the tune of $12 billion dollars.

The billionaire will exercise several warrants obtained six years ago that were a vote of confidence in the bank while its shares were tumbling during probes from the housing meltdown of 2007-2008.

In a 2011 deal Buffett's company Berkshire Hathaway Inc. invested $5 billion in Bank of America. In exchange the financial giant gave preferred stock and the right to buy 700 million, which is now worth about $17 billion.

Berkshire Hathaway released a statement saying it would convert its preferred shares to common stock on the Charlotte based bank increases its dividend, which is planned for the beginning of the third quarter.

In a February letter to investors Buffett laid out his thinking for the conversion, which will make him the company's biggest shareholder. Stating that it made sense to convert it to common stock should those shares begin earning more.

By converting the preferred stock into common shares, Berkshire's payout will rise to $336 million a year. The $12 billion in gains come on top of $1.5 billion it received from preferred stake over the past six years.

Buffett's investment shored up confidence in BOA at a critical time. The financial giant soon rebounded after the show of confidence. Shares jumped from $7.14 a share six years ago to $24.32 per share on Thursday.

This latest episode highlighted Buffett's role as a financial firefighter and is similar to investments he made in Goldman Saks and General Electric Co. during the 2008 crisis.

In both cases he also extracted generous terms in exchange for vouching for those companies' long term futures.

Banks are nothing new to Berkshire Hathaway, a longtime holder of Wells Fargo and M&T Bank. It began holding American Express shares in the mid 1990's and US Bancorp in 2006.

In addition to now being the largest shareholder in Bank of America, Berkshire Hathaway is also the largest shareholder of Wells Fargo.

Buffett is worth about $76 billion dollars according to Forbes.