That Lending Club's battered shares climbed on a day when the online lender reported a slew of bad news — including mass layoffs and sharply reduced growth projections — is partly a reflection of just how far its stock has fallen over the last 18 months.

But investors also seem to be betting that Lending Club's worst days are behind it.

That seemed to be the message Lending Club executives were aiming to send during the firm's annual meeting Tuesday, which was held several hours after the company dumped its gloomy disclosures into a securities filing.

"We are acting swiftly and responsibly," CEO Scott Sanborn told the company's shareholders. "Policies and processes have been improved, governance is being strengthened, and transparency enhanced. We are determined — determined to win back your trust, determined to once again grow this company."

Sanborn was named acting CEO of Lending Club on May 9, and the firm said Tuesday that its board has now removed the interim label from his title.

"He has demonstrated extraordinary leadership and command of the business during his six-year tenure with the company. And I could say especially over the last seven weeks, which might have felt like seven years in some ways," said Hans Morris, the firm's independent chairman. "I also would say that Scott has an unblemished track record of integrity."

To say that Lending Club had bad news to report on Tuesday would be an understatement.

The firm announced that it is laying off 179 employees, or 12% of its workforce. Lending Club said that it expects its second-quarter loan volume to be about 33% lower than it was during the first three months of the year.

To hang onto investors and its remaining employees, and to cover the costs of additional fallout from the May 9 ouster of founder and CEO Renaud Laplanche, the company expects to spend $24 million to $29 million.

Lending Club also reported a $20 million to $40 million writedown related to slower-than-expected growth at its education and health financing arm.

There was a disclosure that Lending Club is planning to spend roughly $800,000 to reimburse limited partners in a subsidiary called LC Advisors. The limited partners were hurt by adjustments to the subsidiary's assets that were not consistent with generally accepted accounting principles.

Finally, the San Francisco-based marketplace lender stated that Laplanche and three of his family members borrowed more than $770,000 on the firm's platform in December 2009, in order to boost reported loan volume.

And yet, despite all the dirty laundry, the shares closed at $4.61 Tuesday — a far cry from its $25 trading price in early 2015, but still up 7% for the day.

During Tuesday's meeting, Lending Club executives expressed optimism that institutional investors who stopped buying Lending Club's loans last month will return to the platform.

"We've talked to hundreds of investors over the last weeks, to listen and answer their questions. And virtually all have told us that they want to continue working with Lending Club," Sanborn said.

"And we've developed a plan to get them there," he said. "In most cases, it involves new rounds of diligence that we've been working to support. And the encouraging news is that many have already satisfied their diligence needs. Others, especially larger investors and regulated institutions, understandably need a little longer. We are being realistic that this is going to take time."

Lending Club's annual meeting was originally scheduled for June 7, but it was hastily adjourned for three weeks. The firm said Tuesday that the meeting was pushed back primarily so that officials would have more time to conduct the review that began in early May. The company said that the review is now "substantially complete."

Lending Club said that it plans to return to revenue growth in the first half of 2017. The firm also reiterated its intention to stick with its long-standing funding model, which matches borrowers with investors, despite the fact that Lending Club has put approximately 2% of the loans it originated this quarter on its own balance sheet.

During the meeting, Morris was asked if the company's board acted in the best interests of shareholders when it ousted Laplanche, who founded Lending Club in 2006.

"I think the answer is unquestionably yes," Morris responded. "We took swift and decisive action on behalf of the shareholders, and we believe we're acting in their long-term interests."

The latest revelations about the former CEO followed an earlier disclosure about an apparent conflict of interest involving Laplanche's investment in a company that did business with Lending Club. Lending Club disclosed last month that it received a subpoena from the Justice Department.

"The fact that there were loans made to the CEO and his family members really feeds into the narrative that some people in the company have been trying to massage numbers," said Jahan Sharifi, a partner at Richards Kibbe & Orbe. "He is gone, so to a certain extent they have addressed that risk."

Other observers were upbeat about Lending Club's prospects for righting the ship.

Brendan Ross, president of Direct Lending Investments, said that Lending Club is fixing its governance problems, and its underwriting remains strong.

He predicted that Sanborn "will run this business the way investors had imagined it had always been run."

During Lending Club's annual meeting, the firm's shareholders reelected three board members: Morris, the venture capitalist Mary Meeker and former Morgan Stanley CEO John Mack.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.