Group results by letter

<?php while ( have_posts() ) : the_post(); ?>
    <?php
    $letter = strtoupper( substr( get_the_title(), 0, 1  ) );
    if ( empty( $last_letter ) || $letter != $last_letter ) {
        echo '<h3 class="letter">' . $letter . '</h3>';
    }
    $last_letter = $letter;
    ?>
    <div><strong><a href="<?php the_permalink(); ?>"><?php the_title(); ?></a></strong><?php the_excerpt(); ?></div>
<?php endwhile; ?>