After sharp increases in the second quarter, letter of credit volume fell during the third quarter at many large U.S. banks, according to an analysis of call report data.

First Union Corp., which has been aggressively increasing its international letter of credit business for several years, reported that its letter of credit balance fell 21% in the quarter, to $2.6 billion. The Charlotte, N.C., banking company dropped in the ranking to No. 4, as BankAmerica Corp., then of San Francisco, reclaimed its standing as the largest letter of credit processor outside New York.

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