OFG Bancorp : Corporate Governance Principles and Guidelines

CORPORATE GOVERNANCE PRINCIPLES AND GUIDELINES

I. INTRODUCTION

The Boards of Directors (the "Board") of OFG Bancorp and Oriental Bank (collectively, the "Company") has developed and adopted this set of corporate governance principles (the "Guidelines") to promote the functioning of the Board and its Committees, to protect and enhance stockholder value and to set forth a common set of expectations as to how the Board, its various Committees, individual Directors and management should perform their functions.

The Board intends that these Guidelines serve as a flexible framework within which the Board may conduct its business. These Guidelines are designed with the Company's current business operations, ownership, capital structure and economic conditions in mind and are expected to evolve as circumstances change.

II . BOARD MISSION AND DIRECTOR RESPONSIBILITIES

The Board is elected by the stockholders to oversee their interest in the long-term health and overall success of the Company's business and financial strength. The Board serves as the ultimate decision-making body of the Company, except for those matters reserved to or shared with the President and CEO or the stockholders. The Board selects and oversees the President and CEO, who is charged by the Board with conducting the business of the Company.

The core responsibility of the Directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its stockholders. Directors must fulfill their responsibilities in a manner consistent with their fiduciary duties to the stockholders, in compliance with all applicable laws and regulations. Directors shall also, as appropriate, take into consideration the interests of other stakeholders, including clients, employees and the members of communities in which the Company operates, and also consider the environmental and social impact of the Company's business activities.

The Board provides advice and counsel to the President and CEO. The Board oversees the proper safeguarding of the assets of the Company, the maintenance of appropriate financial and other internal controls and the Company's compliance with applicable laws and regulations and proper governance.

Approved on: January 27, 2021

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In discharging their duties, Directors may rely on the Company's senior executives and outside advisors and auditors. The Board has the authority to retain independent legal, financial and other advisors as they may deem necessary.

Directors owe their primary duty of loyalty to the Company and its stockholders. This duty of loyalty mandates that the best interests of the Company and its stockholders take precedence over any personal interests of a Director. To prevent inadvertent conflicts of interest or the appearance of a conflict of interest, Directors must disclose all other business relationships with the Company and shall not participate in any Board discussions and decisions affecting those other business relationships.

Directors are expected to attend all meetings of the Board and of the Board Committees on which they serve. Directors should devote the time and effort necessary to fulfill their responsibilities. Information important to Directors' understanding of issues to come before the Board or Committee will be sent to them sufficiently in advance of meetings to permit Directors to inform themselves. Directors are expected to review these materials before meetings.

The Board of Oriental Bank will hold regularly scheduled monthly meetings and the Board of OFG Bancorp will hold regularly scheduled meetings at least four (4) times a year. The Chairperson of the Board will set the agenda for Board meetings with the assistance of the President and CEO. Any Director may suggest items for inclusion on the agenda. Any Director may raise a subject that is not in the agenda at any meeting. Certain items pertinent to the oversight and monitoring function of the Board will be brought to the Board regularly. The Board will review the Company's long-term strategic plans at least one Board meeting each year and review the most significant financial, accounting and risk management issues facing the Company on a regular basis.

Non-management Directors will meet in regular executive sessions. Normally, such executive sessions will occur during regularly scheduled Board meetings. If the Chairperson of the Board is part of management, meetings of the non-management directors will be chaired by the Lead Independent Director.

Directors are encouraged to identify and seek new business opportunities that contribute to the Company's growth and profitability.

Directors shall comply with the Company's Officers and Directors Stock Ownership Policy while they are serving in the Company's Board.

Directors shall maintain the confidentiality of all non-public information about the Company affairs to which they have access by virtue of their functions as Board members. This obligation shall continue in effect after a Director ceases to serve on the Board.

Approved on: January 27, 2021

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Directors shall inform the Chairperson of the Board and the Board's Secretary of

1. any change in their principal occupation or status as a member of the board of any other public company, including retirement: (ii) any change in circumstance that may cause his/her status as an "independent director" to change; and (iii) any activity that may rise to the level of a material conflict of interest, such as an affiliation with a competitor or supplier of Company. The Corporate Governance and Nominating Committee shall be informed by the Chairperson of the Board of any aforementioned changes in a Director's circumstances. The Committee shall consider the Director's change in circumstances and make appropriate recommendations to the Board in that regard.

III. BOARD LEADERSHIP

The Board believes that whether to have the same person occupy the offices of Chairperson of the Board and Chief Executive Officer should be decided by the Board, from time to time, in its business judgment after considering relevant factors, including the specific needs of the business and what is in the best interest of the Company's stockholders.

The Board annually elects one of its members to serve as Chairperson of the Board. The Chairperson of the Board shall preside at all meetings of the Board and stockholders, and shall perform such duties, and exercise such powers, as prescribed in the By-Laws or by the Board from time to time.

If the individual elected as Chairperson of the Board is the Chief Executive Officer, or if the Chairperson of the Board is not independent, the Board will appoint a Lead Independent Director to help ensure robust independent leadership on the Board. When this is the case, the independent Directors shall annually elect a Lead Independent Director for a one-year term.

The Lead Independent Director shall:

1. Preside at all meetings of the Board at which the Chairperson of the Board is not present, including all meetings of independent Directors;
2. Encourage and facilitate active participation of all Directors;
3. Serve as liaison between the independent Directors and the Chairperson of the Board on sensitive issues and otherwise when appropriate;
4. Approve Board meeting agendas after conferring with the Chairperson of the Board and may add agenda items in his or her discretion;

Approved on: January 27, 2021

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1. Approve Board meeting schedules to assure that there is sufficient time for discussion of all agenda items;
2. Have the authority to call meetings of the independent Directors;
3. Lead the Board annual evaluation of the Chairperson of the Board and the Chief Executive Officer;
4. Monitor and coordinate with management on corporate governance issues and developments;
5. Be available to advise the Committee chairs in fulfilling their designated roles and responsibilities to the Board; and
6. Perform such other functions as the Board may request.

Agendas, schedules, and information distributed for meetings of Board Committees are the responsibility of the respective Committee chairs. All Directors may request agenda items, additional information, and/or modifications to schedules as they deem appropriate, both for the Board and the Committees on which they serve, and they are encouraged to do so.

IV. DIRECTOR QUALIFICATIONS

Directors may be nominated by the Board or by stockholders in accordance with the By-Laws. The Corporate Governance and Nominating Committee will review all nominees for the Board, including proposed nominees of stockholders, in accordance with its Charter. The assessment will include a review of the nominee's judgment, experience, independence, understanding of the Company's or other related industries, and such other factors as the Committee concludes are pertinent in light of the current needs of the Board. The Board believes that its membership should reflect a diversity of experience, gender, race and age. The Committee will select qualified nominees and make its recommendations to the Board, which will decide whether to invite the nominee to join the Board. The Chairperson of the Board should extend the Board's invitation to join the Board.

V. DIRECTOR TERM AND TENURE

In accordance with the By-Laws, Directors are elected for a term of one year. The Board does not believe that it should establish limits on the number of terms a Director may serve. Term limits may cause the loss of experience and expertise important to the

Approved on: January 27, 2021