CHARLOTTE, N.C. – Bank of America Corp. said Thursday morning that investor Warren Buffett is buying preferred shares in the company worth $5 billion, sending the stock soaring as much as 25 percent in morning trading.

The investment comes after a rollercoaster month in which the bank’s shares threatened to fall below $6 on Tuesday. They closed Wednesday at $6.99 after an 11 percent jump.

Buffett, who is buying Bank of America shares through his Berkshire Hathaway Inc. investment conglomerate, has offered similar lifelines to distressed companies in the past. During the 2008 financial crisis, he took stakes in Goldman Sachs and General Electric in exchange for lucrative dividend payments.

A source familiar with the situation said Buffett called Bank of America chief executive Brian Moynihan on Wednesday morning and offered to invest in the bank. Moynihan said the company didn’t need any more capital and Buffett responded that was why he wanted to buy into the company, an indication that he thought it was a sound investment, the source said. The deal was then worked out in less than 24 hours.

“Bank of America is a strong, well-led company, and I called Brian to tell him I wanted to invest in it,” Buffett said in a statement. “I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them.”

Moynihan in a statement said he remains confident that the nation’s biggest bank has the capital and cash on hand that it needs.

“At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy,” he said.

Moynihan was in New York when he took Buffett’s call. Buffett was in Omaha, Neb., Berkshire Hathaway’s home base. Charlotte businessman C.D. “Dick” Spangler, one of the largest individual shareholders in the bank, said Buffett’s investment is a vote of confidence in Moynihan and his team.

“Having Warren Buffett join the Bank of America ship is like having a whole squadron of Navy SEALs supporting you,” Spangler said.

In the deal announced Thursday, Bank of America is selling 50,000 shares of preferred stock with a liquidation value of $100,000 per share to Berkshire Hathaway in a private offering. The stock has a dividend of 6 percent per year and can be redeemed by Bank of America at any time at a 5 percent premium.

In addition, Berkshire Hathaway will also receive warrants to buy 700 million shares of Bank of America common stock at an exercise price of a little more than $7.14 per share. The warrants may be exercised at any time during a 10-year period following the closing of the transaction. Bank of America receives $5 billion in cash for issuing the preferred shares and warrants.

If Buffett were to exercise the warrants it would cause Bank of America to issue new shares, diluting the holdings of existing stockholders. After issuing new stock to absorb losses and fortify its balance sheet in recent years, the bank’s share count has increased to 10.1 billion from 4.5 billion at the beginning of 2008.

“We believe we have more than enough equity capital to run the company,” bank spokesman Jerry Dubrowski said. “We also believe an investment by Warren Buffett is a strong endorsement of our strategy. I think the market’s reaction validates that.”

In the deal, Moynihan fared better than Goldman Sachs and General Electric did during the 2008 financial crisis. In both cases, the companies agreed to issue preferred shares to Berkshire with a dividend of 10 percent that could be paid back at a 10 percent premium. Goldman received a $5 billion investment in September 2008, while General Electric scored $3 billion in October 2008.

Wachovia executives sought out Buffett as an investor in September 2008 as the Charlotte bank struggled under the weight of its deteriorating mortgage portfolio. But Buffett backed off when he felt the potential investment became too pricey. Later, Wachovia’s fortunes reversed, and the bank was bought by Wells Fargo. According to Wells Fargo’s latest proxy filing this spring, Buffett was Wells’ biggest investor, owning 7 percent of the San Francisco-based bank’s common stock.

According to CNBC reporter Becky Quick, Buffett dreamt up the Bank of America investment idea while in the bathtub Wednesday morning. He had never spoken with Moynihan before and didn’t have his phone number. He had an assistant call Moynihan’s assistant and set up a call.

“I asked him why now and he said he thinks it’s better than anything else that I can think of at the time,” Quick said on CNBC. “He also said that it’s very likely that over ten years, that they do exercise and own all of those warrants, that they turn them into shares.”

If Buffett exercises the warrants for the 700 million shares, he would own about 6.5 percent of Bank of America’s common stock.

Buffett said Wells and Bank of America have the best deposit franchises in the country, Quick said.

“He does say that Bank of America has significant problems in their past, but they’re working their way through them,” she said. “He admits this is not something that’s going to be resolved in a week, month, very likely even in a year.” Nancy Bush, contributing editor to SNL financial, said the move was a good deal for both sides.

“Warren Buffett is the ultimate value investor,” she said. “He just obviously saw a deal that was too good to pass up. It gives him a smart investment, and it gives Bank of America sort of a shot in the arm of confidence when they needed it.” Bush said the deal will allow potential investors in the bank’s common stock to look beyond “today’s issue” of the bank’s mortgage woes and toward its long-term potential, adding that “this company has just been subject to some really extreme rumor-mongering and high-frequency trading.”

The deal could also prompt other private-equity investors to seek a stake in other banks, boosting the broader financial sector.

“It’s a very strange time right now for banks generally,” Bush said. “… As we kind of get through this mini-crisis that we’ve had in the last few weeks, there’s going to be obviously very smart investors who start looking at the banks more positively. Not everyone is subject to the hype.” Staff writer Kirsten Pittman contributed.

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