Though Lending Club is striving to move beyond the scandal that ended its reign as the nation’s leading online lender, the damage continues to pile up.

The San Francisco company reported a $32 million fourth-quarter loss, bringing its losses for the full year to $146 million. It reported profits of $4.6 million in the fourth quarter of 2015.

Scott Sanborn
Lending Club CEO Scott Sanborn is seeking to engineer a bounceback from the scandal that led to the ouster of his predecessor in May 2016.

Lending Club, which has been publicly traded since December 2014, does not expect to get into the black this year. Its newly released guidance for 2017 projects a loss of $69 million-$84 million. Shares in the company fell by 6.5% in after-hours trading Tuesday.

Still, Lending Club CEO Scott Sanborn delivered an upbeat message during a call with reporters shortly after the company’s earnings report was released. He sought to turn a page from the scandal, which led to the departure of longtime CEO Renaud Laplanche in May 2016.

“I think overall we’re now ready to kind of begin to leave the remediation and recovery behind,” Sanborn said.

During the fourth quarter, Lending Club originated $1.99 billion in loans, which was down 23% from the same period a year earlier and up 1% from the third quarter of 2016.

Lending Club offers consumer installment loans over the internet. Unlike banks, the company does not make the loans from its own balance sheet; instead, it matches consumers, who are often looking to refinance credit card debt at a lower interest rate, with investors who want to shoulder the risk that the loans will default.

The online platform’s investors include individual savers, hedge funds and banks. Amid the scandal, which involved the falsification of certain information that the company provided to investors, numerous banks got cold feet.

Lending Club spent lots of time and money last year seeking to bolster its internal processes and controls in an effort to restore the confidence of banks, which typically do not demand the same high level of financial returns that hedge funds do.

Those efforts yielded results during the fourth quarter, as banks provided 31% of Lending Club’s funding. That number was up from just 13% in the third quarter, and from 23% in the fourth quarter of 2015. Sanborn said that the company not only regained all of its key bank investors, but also added some new ones.

“I think it’s a testament to the work we’ve done on the control environment and the investments we’ve been making,” he said.

Still, the company expects the scandal to keep weighing on its financial results in 2017, particularly during the first half of the year. Lending Club has been rewarding its employees with elevated pay – the sweetened compensation was aimed at retaining workers during a tumultuous period – and Sanborn said those additional costs will continue to accumulate during the first and second quarters.

At the same time, Sanborn said that he wants to focus on reigniting growth. Between 2010 and 2015, Lending Club’s annual loan volume blossomed from around $125 million to $8 billion.

One area of potential growth is auto loans. Lending Club launched its auto lending business in October and is now operating in 27 states. But, Sanborn cautioned, “We have not been marketing that product in earnest and don’t plan to until later in the year.”

In other comments, Sanborn expressed interest in the special-purpose charter for fintech companies that is under development by the Office of the Comptroller of the Currency, though he did not commit to applying for the charter.

Lending Club currently issues its loans through WebBank in Salt Lake City. That arrangement allows the company to make loans in all 50 states without getting separate licenses from each of them. The OCC’s proposed charter would carry the same benefit.

“We’re happy with the structure we have, but we certainly think that we’re interested, and do plan to explore and understand what the parameters are of the OCC charter,” Sanborn said. “So we do plan to engage there.”

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