Lending Club reported a smaller loss in the third quarter as the San Francisco-based marketplace lender sought to move beyond a scandal that interrupted its rapid growth.

The onetime darling of the fintech sector recorded a $36.5 million loss between July and September. That was an improvement from an $81.4 million loss during the second quarter, when the company's founder and chief executive was ousted. Lending Club reported a per-share loss of 4 cents during the third quarter, which was better than the 7-cent loss that was the consensus estimate of analysts.

Lending Club's stock price, which has been hammered over the past year, was up 17.6% in midday trading Monday. Still, at $6.03, the share price was down by more than 55% from a year earlier.

Lending Club's third-quarter performance was boosted by a 10% increase in operating revenue from the second quarter, as well as a 20% reduction in operating expenses.

Still, certain costs were higher than normal, as Lending Club continued to deal with the fallout from a scandal involving executives who falsified data about loans the company was selling to investors. The firm said that its third-quarter results were hurt by roughly $20 million in unusual expenses, including money paid to retain certain employees.

Lending Club runs an online marketplace that connects consumers who want to borrow, often to consolidate existing credit card debt, with investors who fund those loans. The company's investors include individuals, hedge funds and banks.

In the midst of the scandal that erupted on May 9, investors became more skittish about buying the company's loans, and Lending Club started offering them financial incentives to continue buying. Lending Club said that it paid $11 million in incentives during the third quarter.

The scandal had an especially pronounced effect on banks, whose share of the firm's loan originations fell from 25% in 2015 to 12% during the second quarter. Last quarter, that number ticked up slightly to 13%, and it was higher by September.

"Throughout the quarter, the mix did shift with banks starting to come back," Lending Club Chief Executive Scott Sanborn said during a conference call with analysts.

Lending Club also announced on Monday that Credigy, a U.S. subsidiary of the National Bank of Canada, has approved investing up to $1.3 billion on the marketplace lender's platform over the next year. Sanborn told analysts that those purchases will be made at market terms but that Credigy will reap certain financial incentives if it reaches the $1.3 billion mark.

Lending Club recently started refinancing consumers' automobile loans, returning to an expansion strategy that was put on hold because of the scandal. But the company is not yet out of the woods. It said it expects to report a net loss of $38 million to $48 million in the fourth quarter.

Sanborn took over as CEO for Renaud Laplanche, whose resignation was announced on May 9.

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