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If We encourage you to vote over the Internet or by telephone prior to the meeting.
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MAY 8, 2024
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27, 2024.
TABLE OF CONTENTSGENERAL QUESTIONS ABOUT THE ANNUAL MEETING 1 Page5 0 513 715 10161516 1716 1718 1718 19 19 20 20 2120 2221222228242927 2928 3628 3729 3729 3837 3837 38 39 39 40 40 41
MAY 8, 2024
Holder
Beneficial Owner of Shares Held in Street Name.If you hold your shares held in “street name,” you should receive a voting instruction form from your securities broker, bank or other similar organization acting as a nominee asking you how you want to vote your shares. If you do not,name”, you should contact your securities broker, bank or other similar organization acting asnominee that holds your shares to request a nomineecopy of your notice and obtain a voting instruction form from them. verify that they have your correct address in their records.
Steven Anreder at sanreder@ofgbancorp.com; Telephone: (212) 532-3232.
2024.
How do I vote?
You can vote either in person at the meeting or by proxy even if you plan to attend the meeting. If you complete and properly sign the accompanying proxy card and return it in the enclosed reply envelope, it will be voted as you direct. If you are a shareholder of record and attend the meeting, you may deliver your completed proxy card in person. Alternatively, in lieu of signing the accompanying proxy card and returning it in the enclosed reply envelope, shareholders of record can vote their shares over the Internet, or by calling a specially designated telephone number. Internet and telephone voting procedures are designed to authenticate shareholders’ identities, to allow shareholders to provide their voting instructions and to confirm that their instructions have been recorded properly. Specific instructions for shareholders of record who wish to use the Internet or telephone voting procedures are set forth in the enclosed proxy card.
Beneficial owners of shares held in “street name” who wish to vote at the meeting will have to obtain a proxy from the securities broker, bank or other nominee that holds their shares. Such beneficial owners may vote their shares by telephone or the Internet if the brokers, banks or other nominees that hold their shares make those methods available. If that is the case, each broker, bank or other nominee will enclose instructions with the proxy statement.
To avoid delays in ballot taking and counting, and in order to ensure that your proxy is voted in accordance with your wishes, we respectfully request that you give your full title when signing a proxy as attorney, executor, administrator, trustee, guardian, authorized officer of an entity, or on behalf of a minor. If shares are registered in the name of more than one shareholder of record, all shareholders of record must sign the proxy card.
For the amendment to our articles of incorporation, the affirmative vote of the holders of a majority of the outstanding shares entitled to vote at the annual meeting will be required for approval. Abstentions and brokernon-votes will have the same effect as a vote against the proposal.
How can
the Board's Risk and Compliance Committee for 7 years.
Our Board of Directors currently has one vacancy, and Mr. Radamés Peña has decided to not stand for reelection. Given the Board’s decision to decrease the number of directors from nine to seven, effective at the 2018 annual meeting, there will not be any vacancies on the Board after the meeting.
Mr. Julian S. Inclán has been nominated by our Board of Directors for election as director forone-year term expiring in 2019, and Mr. Pedro Morazzani has been nominated by our Board of Directors for election as director for a three-year term expiring in 2021. If the amendments to our articles of incorporation proposed herein are approved, the terms of all of our directors, including Mr. Morazzani, will expire at the 2019 annual meeting of shareholders, and all directors will thereafter be elected annually.
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Stock Ownership Policy Compliance as of December 31, 2017:
| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 99,330 | 12,680 | $1,816,221 | 14.77 | 4 |
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Stock Ownership Policy Compliance as of December 31, 2017:
| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 33,020 | 0 | $498,382 | 5.75 | 4 |
*****
If any person named as a nominee is unable or unwilling to stand for election at the time of the annual meeting, the proxy holders will nominate and vote for a replacement nominee or nominees recommended by our Board of Directors. At this time, the Board knows of no reason why any of the nominees listed above may not be able to serve as a director if elected.
Our Board of Directors recommends that you vote “FOR ALL” in this proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to our shares of common stock beneficially owned by persons, including any “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), known to us to be beneficial owners of more than 5% of the outstanding shares. The information is based exclusively upon filings made by such persons or entities pursuant to the Exchange Act.
Name and Address of Beneficial Owner | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount of Shares Beneficially Owned | Percent of Class1 | ||||||||||||||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 5,652,208 | 0 | 5,765,959 | 0 | 5,765,959 | 13.1 | % | |||||||||||||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | 47,881 | 3,300 | 4,868,544 | 47,656 | 4,916,200 | 11.18 | % | |||||||||||||||||
Dimensional Fund Advisors LP Building One 6300 Bee Cave Road Austin, TX 78746 | 3,518,225 | 0 | 3,693,055 | 0 | 3,693,055 | 8.40 | % | |||||||||||||||||
Munder Capital Management and Integrity Asset Management 480 Pierce St. Birmingham, MI 48009 | 3,905 | 2,430,977 | 0 | 2,746,501 | 2,746,501 | 6.1 | % | |||||||||||||||||
FMR LLC and Abigail P. Johnson2 245 Summer Street Boston, MA 02210 | 148,280 | 0 | 2,269,606 | 0 | 2,269,606 | 5.164 | % | |||||||||||||||||
The following tables set forth information as to the number of our shares of common stock and serial preferred stock beneficially owned as of December 31, 2017, by (i) the directors; (ii) the Chief Executive Officer, Chief Financial Officer, the three most highly compensated executive officers, other than the CEO and CFO, who were serving as executive officers on December 31, 2017 (collectively, the “Named Executive Officers” or “NEOs”); and (iii) the directors and executive officers, including the NEOs, as a group. The information is based upon filings made by such individuals pursuant to the Exchange Act, and information furnished by each of them.
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Name of Beneficial Owner Named Executive Officers José Rafael Fernández Ganesh Kumar Maritza Arizmendi Ramón Rosado-Linera César Ortiz Directors and Executive Officers as a Group7 Amount and Nature of Beneficial
Ownership of Common Stock (#) Percent of
Common Stock1 450,526 2 1.03 % 150,454 3 — 12,500 4 — 27,044 5 — 43,170 6 — 1,050,239 2.39 %
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership of Series B Preferred Stock (#) | Percent of Series B Preferred Stock1 | ||||||
Directors and Named Executive Officers | ||||||||
Radamés Peña | 25,662 | 1.86 | % | |||||
Directors and Executive Officers as a Group2 | 25,662 | 1.86 | % | |||||
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership of Series D Preferred Stock (#) | Percent of Series D Preferred Stock1 | ||||||
Directors and Named Executive Officers | ||||||||
Julian S. Inclán | 12,680 | 1.32 | % | |||||
José Rafael Fernández | 5,560 | — | ||||||
Directors and Executive Officers as a Group2 | 32,260 | 3.36 | % | |||||
For purposes of the foregoing tables, beneficial ownership is determined in accordance with Rule13d-3 under the Exchange Act, pursuant to which shares are deemed to be beneficially owned by a person if he or she directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote or direct the voting of the shares, and/or the power to dispose or direct the disposition of the shares, whether or not he or she has any economic interest therein. Unless otherwise indicated in the foregoing tables, the named beneficial owner has sole voting and investment power with respect to the shares, subject, in the case of those directors and officers who are married, to the marital community property laws of Puerto Rico. Under Rule13d-3, a person is deemed to have beneficial ownership of any shares of common stock which he or she has a right to acquire within 60 days, including, without limitation, pursuant to the exercise of any option, warrant or right. Shares of common stock which are subject to such options or other rights of acquisition are deemed to be outstanding for the purpose of computing the percentage of outstanding common stock owned by such person, but are not deemed outstanding for the purpose of computing the percentage of common stock owned by any other person.
INFORMATION WITH RESPECT TO CERTAIN DIRECTORS AND
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Set forth below is certain information with respect to each director whose term continues.
Directors whose terms expire in 2019
José R. Fernández San Juan, PR Director since 2005 Non-Independent Age: | Mr. Fernández is the President, CEO and a Vice Chairperson of the Board of Directors of the Company and Oriental Bank. He is also the Chairperson of the Boards of Directors of all of our other subsidiaries, and the President of Oriental Insurance LLC and Oriental International Bank, Inc. Mr. Fernández is also a member of the Business Advisory Council of the University of Notre Dame’s Mendoza Business School, the Advisory Board of the Puerto Mr. Fernández holds a Our Corporate Governance and
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Board and Committees | Meeting | Attendance | |||||||||||||||
Board (Vice Chair) | 5 of 5 | ||||||||||||||||
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| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 395,201 | 5,560 | $6,103,900 | 7.06 | 4 |
2023:
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 544,400 | $20,404,100 | 21.82 | 5 | |||||||||||||||||
Jorge Colón-Gerena San Juan, PR Director since 2014 Independent Age: 57 | Mr. Colón-Gerena is the President, CEO and principal shareholder of various restaurant franchise operations that have the exclusive rights in Puerto Rico to the Wendy’s, Applebee’s, Sizzler, Longhorn, Olive Garden and Red Lobster franchises. He also serves on the Boards of Directors of our primary bank subsidiary, Oriental Bank, and the Center for a New Economy, an economic policy think-tank. Mr. Colón-Gerena holds a bachelor’s degree in Arts & Sciences from the Interamerican University, San Juan, Puerto Rico, and has completed executive management courses at Northwestern University and Harvard Business School. Our Corporate Governance and Nominating Committee recommended Mr. Colón-Gerena as a nominee, and our Board of Directors concluded that he should continue to serve as a director of the Company based on his extensive experience in retail food service franchises, which complements the diversity of experience of our Board. | |||||||
| Board and Committees | Meeting | Attendance | ||||||||||||
Board | 5 of 5 | 100 | % | |||||||||||
| Audit | 8 of 9 | 89 | % | |||||||||||
| Compensation (Chair) | 3 of 3 | 100 | % | |||||||||||
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 105,500 | $3,954,140 | 54.92 | 4 | |||||||||||||||||
Néstor de Jesús Guaynabo, PR Director since 2016 Independent Age: | Mr. de Jesús was an investment banker for 30 years | |||||||
Our Corporate Governance and Nominating Committee recommended Mr. de Jesús as a nominee, and our Board of Directors concluded that he should | ||||||||
Board and Committees | Meeting | Attendance | |||||||||||||||
Board | 5 of 5 | 100 | % | ||||||||||||||
Corporate Governance and Nominating (Vice-Chair) | 3 of 3 | 100 | % | ||||||||||||||
Risk and Compliance (Chair) | 4 of 4 | 100 | % | ||||||||||||||
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| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 11,200 | 0 | $169,045 | 2.77 | N/A |
2023:
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 23,390 | $876,657 | 11.10 | 4 | |||||||||||||||||
Directors whose terms expire in 2020
Annette Franqui Miami, FL Independent Age: | Annette Franqui is a Founding Partner, President and Our Corporate Governance and Nominating Committees recommended Ms. Franqui as a | |||||||
Board and Committees | Meeting | Attendance | |||||||||||||||
Board | 5 of 5 | 100 | % | ||||||||||||||
| 3 of 3 | 100 | % | ||||||||||||||
Corporate Governance and Nominating | 3 of 3 | 100 | % | ||||||||||||||
| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 33,572 | 0 | $506,713 | 7.47 | 4 |
2023:
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 600 | $22,488 | 0.37 | — | |||||||||||||||||
Susan Harnett Denver, CO Director since 2019 Independent Age: | Ms. Harnett is a Her professional credentials include she was COO of She served as an independent director and Our Corporate Governance and | |||||||
Board and Committees | Meeting | Attendance | |||||||||||||||
Board | 5 of 5 | ||||||||||||||||
| 3 of 3 | ||||||||||||||||
Risk and Compliance | 4 of 4 | ||||||||||||||||
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| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 19,341 | 0 | $291,920 | 4.52 | 4 |
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| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 5,500 | $206,140 | 3.17 | 4.00 | |||||||||||||||||
Angel Vázquez San Juan, PR Director since April 2023 Independent Age: | Angel Vázquez has been the President Our Corporate Governance and | |||||||
Board and Committees | Meeting | Attendance | |||||||||||||||
Board | 4 of 4 | 100 | % | ||||||||||||||
Audit | 5 of 6 | 83 | % | ||||||||||||||
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| 2 of 2 | 100 | % | ||||||||||||||
| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 20,850 | 0 | $314,696 | 4.81 | 4 |
Executive2023:
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| — | — | — | — | |||||||||||||||||
Rafael Vélez Dorado, PR Director since October 2021 Independent Age: 50 | Rafael Vélez is the Founder and President of Atabey Capital (2016), a private equity advisement firm, and Campo Alegre (2016), a 500-acre pineapple farm in Puerto Rico. Previously from 2007 until 2019, he was the Founder and President of Putney Capital Management with offices in Santo Domingo, Dominican Republic and Puerto Rico, a non-discretionary advisor to an investment fund with investments in the energy, agroindustry and construction material sectors in the Caribbean and North of Latin American region. From 2004 to 2012, he was the founding partner of Barreto & Vélez, a CPA firm specialized in advising clients manage inherent risks through sound corporate governance practices. Mr. Vélez also serves as Board member of the Boys & Girls Club of Puerto Rico as well as YPO Puerto Rico and is a member of the Georgetown Latin American Policy Association. Our Corporate Governance and Nominating Committees recommended Mr. Vélez as a nominee, and our Board of Directors concluded that he should continue to serve as a director of the Company based on his vast accounting and investment experience, which makes him highly qualified to fulfill his responsibilities as a director of the Company. | |||||||
| Board and Committees | Meeting | Attendance | ||||||||||||
| Board | 5 of 5 | 100 | % | |||||||||||
| Audit | 4 of 4 | 100 | % | |||||||||||
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 9,375 | $351,375 | 4.88 | 1.33 | |||||||||||||||||
more remote than first cousin).
Julian S. Inclán Dorado, PR Director since 2008 Independent Age: 76 | Mr. Inclán is the CEO and Chairman of the Board of American Paper Corporation, a distributor of fine papers, office supplies and graphic art supplies, and whose subsidiary, Design Hub, is the agent for a major office contract furniture manufacturer and the importer and designer of customer home furniture units. He previously also served as President of American Paper Corporation from September 1994 to January 2013. He is also the Managing Partner, President and Administrator of various real estate development and investment companies. Mr. Inclán also serves as Chairperson of the Board of Directors of Oriental Bank. He holds an M.B.A. from Columbia University. | |||||||
Maritza Arizmendi, CPA, Esq. Chief Financial Officer San Juan, PR Age: | Since 2017, Ms. Arizmendi has served as our Chief Financial Officer. She previously served as our Senior Vice President of Corporate Finance and Chief Accounting Officer. Previously at BBVAPR, she served in turn as Chief Financial Officer and Treasurer, Senior Vice President of Financial Planning, and Vice President of Risk Management. Prior to its acquisition by BBVAPR, Ms. Arizmendi was a Vice President of Loan Review at Poncebank. Her career began at PricewaterhouseCoopers LLP, where she attained the position of Senior Auditor. Ms. Arizmendi received her bachelor’s degree in accounting and her J.D. from the University of Puerto Rico. She is a Certified Public Accountant and is admitted to practice law in Puerto Rico. | |||||||
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 84,962 | $3,184,376 | 8.09 | 3 | |||||||||||||||||
Ada García Managing Director, Customer Intelligence and Operations San Juan, PR Age: 60 | Ms. García was appointed | |||||||
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 39,848 | $1,493,503 | 5.04 | 3 | |||||||||||||||||
Hugh González, Esq. General Counsel San Juan, PR Age: 44 | Mr. González serves as our General Counsel since January 2021 and as Secretary of our Board of Directors since January 2024. As General Counsel, Mr. González supervises the legal department and serves as the chief compliance officer supervising the corporate compliance and BSA/AML compliance departments. He also serves as Secretary of the Boards of Directors of various subsidiaries, including Oriental Bank, Oriental Financial Services LLC, OFG Ventures and OFG USA LLC. Mr. González also serves a member of the Board of Directors of YMCA of San Juan, Inc. Previously, he served as our Deputy General Counsel and Assistant Secretary since 2012. Mr. González was an associate at McConnell Valdés LLC, where he was elected member prior to joining the Company in 2012. He received his bachelor’s degree in philosophy from Columbia College, Columbia University, and his J.D. from New York University School of Law. | |||||||
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 18,858 | $706,798 | 2.48 | 1.67 | |||||||||||||||||
Patrick Haggarty. Managing Director, Commercial Banking San Juan, PR Age: 64 | Mr. Haggarty is the Managing Director of Commercial Banking and is responsible for Corporate & Institutional Banking, Transactional Services, International Trade Services and Trust Operations since 2012. From 2012 to November 2021, he also supervised Trust Sales and Oriental Pensions Consultants. Before 2012, Mr. Haggarty served in similar roles at BBVAPR. He also serves as board member and Treasurer of Colegio de Educación Especial & Rehabilitation, Inc., a Puerto Rico non-profit. He received a bachelor’s degree from Tufts University and an MBA from the IESE Business School of the University of Navarra. | |||||||
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 38,483 | $1,442,341 | 6.16 | 3 | |||||||||||||||||
Ganesh Kumar Chief Strategy Officer, U.S. Business San Juan, PR Age: 59 | Mr. Kumar serves as our Chief Strategy Officer for U.S. Business since 2023 overseeing our US loan portfolio and strategic | |||||||
| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 110,314 | 0 | $1,665,006 | 3.51 | 3 |
2023:
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 220,055 | $8,247,661 | 15.00 | 3 | |||||||||||||||||
César A. Ortiz, CPA, Esq.
Chief
San Juan, PR Age: 49 | Mr. Ortiz was | |||||||
Stock Ownership Policy Compliance as of December 31, 2017:
| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 10,000 | 0 | $150,933 | 0.58 | 1.5 |
*****
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Stock Ownership Policy Compliance as of December 31, 2017:
| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 23,519 | 0 | $354,980 | 1.40 | 2 |
*****
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| Qualifying Common Stock | Qualifying Preferred Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||
| 39,445 | 0 | $595,357 | 2.38 | 2 |
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | |||||||||||||||||
| 21,011 | $787,491 | 2.33 | 3 | |||||||||||||||||
Mari Evelyn Rodríguez Chief Retail Banking Officer San Juan, PR Age: 53 | Ms. Rodríguez, Chief Retail Banking Officer since 2023, focuses on growing the small business, residential mortgage, and auto loan portfolios. Previously, Ms. Rodríguez was CEO of Marsh McLennan's Puerto Rico Office from 2017 to 2023, where she drove significant growth and managed the Hurricane Maria response. Earlier, she served as Senior Vice President at another Puerto Rico financial institution from 2013 to 2016 and held various roles at Oriental, including Senior Vice President of Commercial Banking from 2008 to 2013. Her early career included positions at Verizon Wireless, Banco Popular, and Advent-Morro Capital Partners. Ms. Rodríguez also contributes to non-profits, serving as Vice President on the Board of Coalición Legal para Puerto Rico and on the Board of Colegio Puertorriqueño de Niñas. She earned her B.A. from Harvard University and an MBA from the University of Michigan's Ross School of Business. | |||||||
| Qualifying Common Stock | Total Value | Multiple of Compensation | Applicable Minimum Multiple Requirement | ||||||||||||||
| 16,109 | $603,776 | 2.16 | — | ||||||||||||||
| Name and Address of Beneficial Owner | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount of Shares Beneficially Owned | Percent of Class1 | ||||||||||||||||||||||||||||||||
| BlackRock, Inc. 55 East 52nd Street New York, NY 10055 | 6,775,077 | — | 6,864,061 | — | 6,864,061 | 14.6 | % | |||||||||||||||||||||||||||||||
| The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 | — | 38,426 | 5,762,329 | 80,691 | 5,843,020 | 12.4 | % | |||||||||||||||||||||||||||||||
| Dimensional Fund Advisors LP Building One 6300 Bee Cave Road Austin, TX 78746 | 3,656,588 | — | 3,656,588 | — | 3,656,588 | 7.8 | % | |||||||||||||||||||||||||||||||
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership of Common Stock (#) | Percent of Common Stock1 | |||||||||||||||
| Directors | |||||||||||||||||
| Julian S. Inclán | 119,617 | 2 | —% | ||||||||||||||
| José Rafael Fernández | 455,758 | 3 | —% | ||||||||||||||
| Jorge Colón-Gerena | 102,300 | 4 | —% | ||||||||||||||
| Néstor de Jesús | 20,190 | 4 | —% | ||||||||||||||
| Annette Franqui | — | —% | |||||||||||||||
| Susan Harnett | 3,300 | 4 | —% | ||||||||||||||
| Angel Vázquez | — | —% | |||||||||||||||
| Rafael Vélez | 7,275 | —% | |||||||||||||||
| Named Executive Officers | |||||||||||||||||
| José R. Fernández | 455,758 | 3 | —% | ||||||||||||||
| Maritza Arizmendi | 61,553 | 5 | —% | ||||||||||||||
| Ada García | 31,464 | 6 | —% | ||||||||||||||
| Ganesh Kumar | 159,621 | 7 | —% | ||||||||||||||
| Mari Evelyn Rodríguez | — | —% | |||||||||||||||
Directors and Executive Officers as a Group8 | 1,015,296 | 2.16% | |||||||||||||||
2004.
Our The Board believes that both of these arrangements can yield strong benefits to the Company as long as an independent director is appointed to a leadership role in the Board, which could be in the role of a Chairperson or of a lead independent director. Previously, the Board had decided that the most appropriate structure for the Company is to have a corporate leadership structure has a split inthat splits the roles of the Chairperson of the Board and the CEO. The position of Board Chairperson is held by Mr. Inclán, an independent director, whereas the position of CEO is held by Mr. Fernández. We believe that the separationndez, who also serves as Vice Chairperson of the Board. However, as part of a Board approved succession plan, Mr. Inclán will retire from the Board of Directors and as Chairperson at the annual meeting of shareholders, and the Board has determined that Mr. Fernández, our CEO, positions isshould serve as the most appropriate structure for us at this time.
In order toChairperson of the Board and Mr. Néstor de Jesús should serve as the lead independent director.
2023.
2023
2023.
2023.
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PROPOSAL 3: AMENDMENT TO ARTICLES EIGHTH AND TENTH OF OUR ARTICLES OF INCORPORATION
Our Board of Directors recommends the amendment of Articles Eighth and Tenth of our articles of incorporation in the manner shown in Appendix A hereto. The proposed amendment to Article Eighth would eliminate the classification of the Board of Directors into three classes each elected to three year terms effective at the 2019 annual meeting of shareholders. At such meeting, all of the terms of office of the our directors will expire, and thereafter, all of the directors will be elected on an annual basis to a term expiring at the next succeeding annual meeting of shareholders, or when their successors are duly elected and qualified.
The proposed amendment to Article Tenth would eliminate this Article in its entirety. This Article provides that a vote of 75% of the total number of outstanding shares is required to approve any proposal that does not have the approval of 80% of the Board of Directors and that seeks to (i) amend Article Tenth, (ii) approve a business combination, or (iii) approve the dissolution of the Company. Upon the elimination of Article Tenth, the approval of business combinations or the dissolution of the Company will only require a majority of the total number of outstanding shares.
These changes will be effective upon the filing of the amendment to the articles of incorporation with the Department of State of the Commonwealth of Puerto Rico.
The Board of Directors unanimously approved this proposal upon the recommendation of the Corporate Governance and Nominating Committee to align our shareholders’ rights with best corporate governance practices. The resolutions attached to this proxy statement as Appendix A will be submitted for adoption at this annual meeting. These amendment to our articles of incorporation require the affirmative vote of a majority of the outstanding shares of our common stock. Therefore, abstentions and brokernon-votes will have the same effect as votes cast against this proposal.
Our Board of Directors recommends that you vote for “FOR” this Proposal.
PROPOSAL 4: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board of Directors has selected KPMG LLP (“KPMG”) as our independent registered public accounting firm for the year ending December 31, 2018, and has further directed that the selection of such firm be submitted for ratification by the shareholders at this annual meeting. KPMG has served as our independent registered public accounting firm since 2005. Neither our articles of incorporation nor ourby-laws require that our shareholders ratify the selection of such firm. If our shareholders do not ratify the selection, the
Audit Committee will reconsider whether or not to retain KPMG, but may nonetheless retain it. Even if the selection is ratified, the Audit Committee, in their discretion, may change the appointment at any time during the year if they determine that such change would be in our best interest.
KPMG will have representatives present at the annual meeting who will have an opportunity to make a brief statement if they desire to do so, and who will be available to respond to appropriate questions that may arise.
Our Board of Directors recommends that you vote “FOR” this proposal.
KPMG served as our independent registered public accounting firm for the year ended December 31, 2017. The services that KPMG provided to the Company and its subsidiaries included the examination of our consolidated financial statements, limited revisions of our quarterly reports, audits of some of our subsidiaries, audits of our employee benefits plan, services related to our filings with the SEC and other regulatory agencies, and consultations on various tax and accounting matters.
The Audit Committee reviewed and approved all audit andnon-audit services rendered by KPMG to the Company and its subsidiaries, and concluded that the provision of such services was compatible with the maintenance of KPMG’s independence in the conduct of its auditing functions. The Audit Committee has adopted apre-approval policy regarding the procurement of audit andnon-audit services, which is available on our website atwww.ofgbancorp.com. The Audit Committee intends to review such policy periodically.
The aggregate fees billed by KPMG for the years ended December 31, 2017 and 2016 for the various services provided to the Company and its subsidiaries were as follows:
Type of Fees | Year Ended December 31, 2017 ($) | Year Ended December 31, 2016 ($) | ||||||
Audit Fees | 1,324,852 | 2,149,500 | ||||||
Audit-Related Fees | — | — | ||||||
Tax Fees | 127,420 | 162,736 | ||||||
All Other Fees | 1,780 | — | ||||||
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| 1,454,052 | 2,312,236 | |||||||
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As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements, including the audit of our internal control over financial reporting, and review of financial statements included on ourForms 10-Q, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those years; (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements; (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.”
Our compensation program is a key component of the Company’s overall compliance andpay-for-performance culture. The Board’s Compensation Committee, with the assistance of our internal risk management staff, regularly reviews this program and does not believe that the risks arising from our compensation policies and practices are reasonably likely to have a material adverse effect on the Company.
We believe that our approach to setting goals and targets with payouts at multiple levels of performance and the evaluation of annual performance results assist in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives. Several features of our compensation program reflect sound risk management practices, including our Compensation Recoupment Policy and our Directors and Officers Stock Ownership Policy, which are described below under the heading “Compensation Discussion and Analysis.”
We allocate compensation among base salary and incentive compensation (bonus and equity awards) to target opportunities in such a way as to not encourage excessive risk-taking. Furthermore, although the performance measures that determine bonus and equity awards for certain business unit leaders are based in part on the achievements of their respective business units, the measures that determine payouts for all of our executives include company-wide metrics. Such metrics, which are not controlled or overly influenced by the results of any single business unit, are given greater weight in the case of NEOs. This is based on our belief that applying company-wide metrics encourages decision-making that is consistent with our philosophy and that is in the best long-term interests of the Company and its shareholders as a whole. Moreover, the mix of equity awards in our incentive program, which includes full value awards such as restricted stock units, and the minimum stock ownership requirements applicable to our top executives also mitigate risk. In addition, the multi-year vesting of our equity awards properly accounts for the time horizon of risk. Finally, each employee’s compliance with our internal policies and procedures, including ethics standards, is an important element of our annual bonus determinations.
We are guided by the principle that our
TheAnalysis explains our executive compensation program for our executives, including our Named Executive Officers (“NEOs”) listed below. It also describes how compensation decisions are made and the reasons for specific decisions made in 2023.
| Name | Title | |||||||
| José R. Fernández | President, CEO and Vice Chairperson of the Board | |||||||
| Ganesh Kumar | Chief Strategy Officer, U.S. Business | |||||||
| Maritza Arizmendi | Chief Financial Officer | |||||||
| César Ortiz | Chief Risk Officer | |||||||
| Mari Evelyn Rodríguez | Chief Retail Banking Officer | |||||||
| WHAT WE DO | WHAT WE DON’T DO | |||||||||||||
| Performance based variable compensation | NO short-selling, hedging or pledging of | |||||||||||||
| Benchmarking against a relevant peer group | Company securities | |||||||||||||
| Independent external compensation consultant | NO supplemental executive retirement plans | |||||||||||||
| Clawback of variable cash and equity | NO severance benefits exceeding 3x base salary | |||||||||||||
| compensation for malfeasance | and annual cash bonus | |||||||||||||
| Annual risk assessment of compensation program | NO excise tax gross-ups | |||||||||||||
| Double-trigger vesting for all outstanding equity | NO repricing, buyout or exchange of underwater | |||||||||||||
| awards in connection with change in control | stock options | |||||||||||||
| Stock ownership requirements | NO guaranteed bonuses | |||||||||||||
| Annual say on pay vote | NO uncapped incentives | |||||||||||||
| NO excessive perquisites | ||||||||||||||
| NO equity compensation plans with evergreen | ||||||||||||||
| provisions | ||||||||||||||
Our general philosophy for setting executive compensation is to increase base salary only inalign the caseinterests of promotions or as necessary in lightour executives with our shareholders by promoting ownership of compensation data for comparable positions at peer group companies.our Company’s common stock through equity awards and minimum stock ownership requirements. Furthermore, a significant component of our compensation program for executives, including theour NEOs, is incentive (variable) compensation that is primarily tied to financial, operational and strategic results. Therefore, such compensation may vary depending on the level of achievement of specificresults over both short and long-term performance measures linked to our business goals. We operate in a challenging market serving almost exclusively clients located in Puerto Rico, and our compensation program is a critical tool for maintaining our competitiveness.
The Compensation Committee of our Board of Directors plays a key role in the development of our compensation program. It consists entirely of independent directors and operates under a written charter approved by our Board of Directors, which is publicly available atwww.ofgbancorp.com. Each meeting of the Compensation Committee has an agenda established in accordance with an annual calendar set by its Chairperson in consultation with the Chairperson of the Board, senior management and the committee members. Additional discussion topics related to external or internal events are added to the agenda from time to time as necessary. The Compensation Committee receives and reviews materials in advance of each meeting, including information on management’s analyses and recommendations. As appropriate, it looks to our senior management and our Human Resources and Internal Audit Departments for support in its work. In the past, our senior management has considered in making its recommendations, among other information, an industry compensation and benefits study sponsored by the Puerto Rico Bankers Association and prepared by a compensation consultant. While the Compensation Committee values input and advice from these and other sources, it exercises its independent judgment in reaching its decisions.
periods.
2017 Advisory Vote on Executive Compensation
At the 2017 annual meeting of shareholders, our shareholders expressed their continued support of
Elements of Compensation
To assure theensure an appropriate mix of fixed versus variable compensation and focus on both short and long-term business performance, we have established four basic elements for our executive compensation program: base salary, annual cash bonus awards, long-term equity-based compensation, andchange-in-control compensation. It is the Compensation Committee’s intention that the compensation paid to our NEOs be deductible by the Company for Puerto Rico income tax purposes, unless there are valid compensatory reasons for paying nondeductible amounts in order to ensure competitive levels of total compensation.
Base Salary. performance.
Annual Cash Bonus Awards. Our annual cash bonus awards reflect a combination of two key elements: level of attainment ofcertain executives, their business unit’s performance targets and individual performance ratings. Business performance targets consistevaluation.
The annual cash bonus award for our CEO, COO and CFO is based solely on the results of our corporate scorecard. For our Senior Vice Presidents, it is based on a combination of the corporate scorecard and the scorecard results of one or more business units. In addition to the corporate and business unit scorecards, the annual cash bonuses for our Senior Vice Presidents take into account the results of their individual performance evaluations.
Long-Term Incentive Compensation. Our long-term incentives are designed to ensure that executives have a continuing stake in our success and to encourage executives to focus on performance goals that will enhance the value of our franchise and capital stock. Such incentives are also designed to retain key executives, reward risk management, and link executive performance to the creation of franchise and shareholder value. Pursuant to our Officers and Directors Stock Ownership Policy, we require our NEOs (among other officers) to own a minimum amount of our equity stock (based on the higher of the market or book value of the stock) equal to four times annual base salary in the case of our CEO, three times annual base salary in the case of certain executive officers, including our COO and CFO, and two times annual base salary in the case of other key officers, including our Treasurer and Senior Vice President of Commercial Credit and Operations. Our executives are required to comply in periods ranging from 2 to 4 years after they receive their first equity award following their appointment. In addition, our Insider Trading and Blackout Policy prohibits all of our employees from entering into any transaction to hedge or offset any decrease in the market value of our securities. We believe that these policies align our executives’ interests with that of our shareholders.
Our Omnibus Plan, an equity based performance incentive plan, provides for awards of stock options, restricted shares, restricted stock units, performance shares, performance units, stock appreciation rights, and dividend equivalent rights. The Compensation Committee has discretion to grant awards from time to time under the Omnibus Plan,used to determine the eligible individuals to whom awards will be granted, and to establish the terms and conditions of each award. The Compensation Committee has approved a three year vesting period for awards of restricted units and a five year vesting schedule for options with a quarter of the option awards vesting annually starting on the second anniversary of the award. Option awards may not be repricedall or repurchased by the Company. We believe that the Omnibus Plan reflects current trends at peer group companies and that it strengthens the link between executive performance and shareholder value.
To further our goal of retaining our key executives, from time to time the Compensation Committee may, if recommended by our CEO, give certain executives who are in compliance with the minimum stock ownership requirements the option of receiving, instead of an equity award, a cash bonus calculated based on the market value of the equity award they would have otherwise been granted payable in equal annual installments.
Change-in-Control Compensation. An important objective of our compensation program is not only the recruitment of seasoned executives but also their retention and commitment to our long-term success. Therefore, to promote their retention and reduce any concerns that they may be adversely affected in the event of achange-in-control of the Company, we have entered into achange-in-control compensation agreement with our CEO and COO pursuant to which the executive is entitled to a cash payment equal to two times the sum of his annual base salary and last cash bonus if there is a change in control and as a result thereof or within one year thereafter his employment is terminated.
Fringe Benefits and Allowances. We provide several fringe benefits, including a defined contribution plan and healthcare coverage, to our NEOs. These benefits do not constitute a significant portion of the NEOs’ total compensation packageannual cash bonus for our NEOs, and are generally availablegrants equity awards to all ofexecutives under our employees. We also offerlong-term incentive plan. As appropriate, it looks to our NEOs anon-qualified deferredsenior management and independent compensation planconsultants for the deferral of taxable income and certain allowances. Such allowances are offered on acase-by-case basis and are not intended to constitute a significant portion of the executive’s compensation. Ournon-qualified deferred compensation plan is more fully described below. We provide these benefits to retain and attract an appropriate caliber of talent and recognize that other companies with which we compete for talent provide similar benefits to their officers and employees. Such benefits and allowances are reviewed annually bysupport in its work. While the Compensation Committee.
Compensation Recoupment. Our Compensation Recoupment Policy, adoptedCommittee values input and advice from these and other sources, it exercises its independent judgment in anticipation of the proposal and implementation of new SEC regulations and NYSE listing standards pursuant to the Dodd-Frank Act, requires that our top executives, who received incentive-based compensation (e.g., bonus, annual incentive or other performance-based cash or equity compensation awards) in the three-year period prior to a restatement of the Company’s financial statements due to materialnon-compliance with financial reporting requirements under the applicable securities laws, return to the Company the amount of such compensation that the executive would not have received but for the misstated financial statements. It is anticipated that this policy may need to be amended in order to conform to the listing standards to be adopted by the NYSE.
Determination of Compensation Decisions
Our decision-making process for determining executive compensation begins with a review of our strategic objectives and business plans. We then consider the scope of responsibilities of each executive, the compensation of similar executives at peer group companies, and the relationship between pay and performance. We further evaluate whether our compensation program meets our goals by monitoring the performance and retention of our executives. We also weigh the business results of the Company in light of the economic environment in Puerto Rico, where practically all of our clients are located. This environment has been particularly challenging in the wake of a ten year recession, a government fiscal crisis and, more recently, the natural disaster caused by hurricane María.
reaching its decisions.
Determining Goals. Prior to the beginning of the year, senior executives and department or division heads meet and discuss goals for the Company in the upcoming year. At the beginning of such year, the Board reviews and approves an annual budget for the Company as a whole and for its banking subsidiary. The Compensation Committee then reviews and assesses performance goals presented by management and determines the structure of the annual bonus awards. These goals include minimum performance thresholds that must be met to earn any bonus awards, as well as performance levels required to achieve maximum payouts. Performance goals are established for each department or division of the Company and for certain executives.
The establishment of performance goalsbase salary increases and the review of the level of achievement of such goals play an essential role in the determination of performance awards. On a quarterly basis during the course of the year, senior management and our Board of Directors review our actual financial performance against the goals set for the year. In addition, our Board of Directors receives quarterly reports detailing our actual financial performance compared to these goals. Such reports are discussed in the corresponding Board meetings.
Determining Executive Compensation. Our method of determining compensation for each NEO varies from case to case based on a discretionary but objective determination of what is appropriate in light of several factors, such as the scope, complexity and degree of challenge of each executive’s responsibilities, as well as his or her performance, skills and experience. Our Board of Directors (solely with respect to our CEO) and its Compensation
Committee may also take into account other relevant factors in making compensation decisions or recommendations for NEOs, including salary data for comparable positions at peer group companies in Puerto Rico and the U.S., and compensation levels at the Company.
On a quarterly basis, department or division heads assess their progress against the goals set for the year and at the end of the year evaluate their results. These self-assessments are reviewed by the CEO who together with our Human Resources Department undertakes an evaluation of each executive’s performance based, in part, on objective measures set forth in the performance scorecard. The CEO considers the financial performance of the Company, the performance of each department or division, and the individual performance of each executive relative to the goals set for the year. In the interest of fairness, he may also recommend subjective ornon-formulaic factors for consideration by the Compensation Committee.
The Compensation Committee annually reviews the performance evaluations of each executive and evaluates the compensatory recommendations provided by our management. Although the Compensation Committee is not obligated to follow any specific recommendation or formula, it generally takes the same formula-based approach in making its own decisions. At different times throughout the year, upon the recommendation of the CEO or otherwise, the Compensation Committee may grant equity awards to executives and/or directors.
Determining CEO Compensation. The Board approves theincentive compensation of the CEO. His compensation level is guided by the terms of his 2018 Employment Agreement. As provided therein, theThe Compensation Committee has discretion tomay increase his salary after the first year, and his target performance bonus under our annual bonus plan is set at 100%and his target long-term incentive are based on a percentage of his base salary.
salary established by the Compensation Committee.
the end of the year, evaluate their results. These assessments are reviewed by the CEO who together with our Director of Human Resources and such executive’s direct supervisor undertakes an evaluation of each executive’s performance based, in part, on objective measures set forth in the performance scorecard. The CEO considers the financial performance of the Company, the performance of each department or division, and the individual performance of each executive relative to the goals set for the year and evaluates the compensatory recommendations provided by our Human Resources Director. In the interest of fairness, he may also take into consideration subjective or non-formulaic factors.
In 2016, our and the Peer Group
was proposed for the Company by Pearl Meyer and approved by our Compensation Committee. Establishing a peer group for the Company is particularly challenging given that the Puerto Rico financial services market is significantly different from the United States and the economy does not generally move in tandem with the economy in the United States. Although Puerto Rico has recently shown signs of an economic recovery, for most of the past 19 years, Puerto Rico has been suffering through a prolonged recession and government fiscal crisis while the United States has seen economic growth and a fiscally stable government. Moreover, during such period the financial services market in Puerto Rico has undergone a dramatic consolidation resulting in only three publicly traded financial services companies that operate in Puerto Rico, one of which is not an appropriate peer due to its significantly larger size. The significant exodus of people from the island of Puerto Rico during these crises has also significantly limited the pool of available talent. Our peer group was selected considering the total asset size of the companies and the regional markets in which they operate relative to the asset size and regional markets of OFG Bancorp. The peer group for our compensation decisions consisted of the following companies:
| Amerant Bancorp Inc. | First Commonwealth Financial Corporation | ServisFirst Bancshares, Inc. | ||||||
| BancFirst Corporation | First Financial Bankshares | TowneBank | ||||||
| Customers Bancorp, Inc. | Independent Bank Group, Inc. | Trustmark Corporation | ||||||
| Eagle Bancorp, Inc. | Renasant Corporation | Univest Financial Corporation | ||||||
| FB Financial Corporation | S&T Bancorp, Inc. | Veritex Holdings, Inc. | ||||||
| First Bancorp (North Carolina) | Sandy Spring Bancorp | WesBanco, Inc. | ||||||
| First BanCorp (Puerto Rico) | Seacoast Banking Corporation of Florida | |||||||
After extensive consideration by our Compensation Committee with the assistance of the independent compensation consultant, which took into account a competitive review of peer banks, and our compensation philosophy and objectives, our Board maintained the compensation package of our CEO pursuant to his 2016 Employment Agreement upon the recommendation of our Compensation Committee. Our Compensation Committee also maintained the compensation of our COO with the target cash bonus percentages implemented for 2016 of 100% and maintaining the special retention bonus of $750,000 payable in 6 semiannual installments commencing on January 1, 2017. The base salary and target bonus percentage of our CFO were increased for 2017 in light of her appointment to the CFO position.
| Name | 2022 Base Salary ($) | 2023 Base Salary ($) | Adjustment (%) | |||||||||||||||||
| José R. Fernández | 935,000 | 935,000 | — | % | ||||||||||||||||
| Ganesh Kumar | 700,000 | 550,000 | (21.4) | % | ||||||||||||||||
| Maritza Arizmendi | 400,000 | 440,000 | 10.0 | % | ||||||||||||||||
| César Ortiz | 274,000 | 295,920 | 8.0 | % | ||||||||||||||||
| Mari Evelyn Rodríguez | — | 350,000 | — | % | ||||||||||||||||
In order to determine each NEO’s performance bonus, the targethis Employment Agreement described below. Mr. Kumar's cash bonus percentage is multiplied by the executive’s base salary, which then is multiplied by the result oftarget was decreased to better align his performance scorecard. Our Internal Audit Department verifies the accuracy of such results.
compensation with his new role.
| 2022 Target Bonus | 2023 Target Bonus | |||||||||||||||||||||||||
| Name | % | Amount ($) | % | Amount ($) | ||||||||||||||||||||||
| José R. Fernández | 90 % | 841,500 | 100 % | 935,000 | ||||||||||||||||||||||
| Ganesh Kumar | 80 % | 560,000 | 70 % | 385,000 | ||||||||||||||||||||||
| Maritza Arizmendi | 70 % | 280,000 | 70 % | 308,000 | ||||||||||||||||||||||
| César Ortiz | 40 % | 112,800 | 40 % | 118,368 | ||||||||||||||||||||||
| Mari Evelyn Rodríguez | — | — | 50 % | 175,000 | ||||||||||||||||||||||
Name | Target Bonus % | Performance Score1 | Performance Bonus ($)1 | Other Bonus ($)1 | ||||||||||||
José Rafael Fernández | 100 | % | 87.87 | 760,100 | 283,333 | |||||||||||
Ganesh Kumar | 100 | % | 87.87 | 417,400 | 335,667 | |||||||||||
Maritza Arizmendi | 40 | % | 87.87 | 116,900 | — | |||||||||||
Ramón Rosado-Linera | 30 | % | 96.71 | 73,700 | — | |||||||||||
César Ortiz | 30 | % | 90.50 | 67,900 | — | |||||||||||
a safe and sound manner. The Compensation Committee established performance metrics based on four key business goals, growth, agility, resiliency, and operating leverage:
| Performance Measure | Weight | % of Target | Score | ||||||||||||||||||||
| Market Share Operating Income | 35 | 105.54 | % | 36.94 | |||||||||||||||||||
| Customer and Digital Adoption | 20 | 195.67 | % | 39.13 | |||||||||||||||||||
| Texas Ratio | 15 | 133.47 | % | 20.02 | |||||||||||||||||||
| Efficiency Ratio | 30 | 103.34 | % | 31.00 | |||||||||||||||||||
| Total | 127.09 | ||||||||||||||||||||||
| Name | Target Bonus % | Performance Score1 | Performance Bonus ($)1 | Other Bonus ($)1 | ||||||||||||||||||||||
| José R. Fernández | 100 | % | 127.09 | 1,188,300 | — | |||||||||||||||||||||
| Ganesh Kumar | 70 | % | 121.00 | 465,900 | — | |||||||||||||||||||||
| Maritza Arizmendi | 70 | % | 127.09 | 391,500 | — | |||||||||||||||||||||
| César Ortiz | 40 | % | 143.49 | 167,700 | — | |||||||||||||||||||||
| Mari Evelyn Rodríguez | 50 | % | 141.32 | 244,500 | — | |||||||||||||||||||||
Performance Measure | Weight | Target | Maximum | % of Target | ||||||||||||
Reduce Credit Costs1 | 15 | $ | 85,451 | 68,361 | 67.95 | % | ||||||||||
Return on Average Assets | 20 | 0.91 | % | 1.14 | % | 92.31 | % | |||||||||
Loan Growth Relative to Market | 15 | 100 | % | 125 | % | 117.65 | % | |||||||||
Core Deposit Growth Relative to Market | 20 | 100 | % | 125 | % | 372.49 | % | |||||||||
OFG Efficiency Ratio | 15 | 58.54 | % | 46.83 | % | 108.43 | % | |||||||||
Risk Management Scorecard | 15 | 100 | 100 | 76.75 | % | |||||||||||
In 2024, the |
The Compensation Committee also approved equity awards to the NEOs for their performance in 2023 as follows:
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| Performance Shares | Restricted Units | % of Base Salary | % Target of Base Salary | |||||||||||||||||||||||||||||||||||||||||
| Name | Target Value ($) | Target Amount | Value ($) | Amount | Total Value ($) | |||||||||||||||||||||||||||||||||||||||
| José R. Fernández | Fernandez Martinez | 562,226 | 2007 OPIP Performance Shares | 15,450 | 562,226 | 2007 OPIP Restricted | 15,450 | 1,124,451 | 120 | % | 120 | % | ||||||||||||||||||||||||||||||||
| Ganesh Kumar | Kumar | 192,867 | 2007 OPIP Performance Shares | 5,300 | 192,867 | 2007 OPIP Restricted | 5,300 | 385,734 | 70 | % | 70 | % | ||||||||||||||||||||||||||||||||
| Maritza Arizmendi | Arizmendi Diaz | 154,658 | 2007 OPIP Performance Shares | 4,250 | 154,658 | 2007 OPIP Restricted | 4,250 | 309,315 | 70 | % | 70 | % | ||||||||||||||||||||||||||||||||
| César Ortiz | Ortiz Marcano | 78,239 | 2007 OPIP Performance Shares | 2,150 | 78,239 | 2007 OPIP Restricted | 2,150 | 156,477 | 53 | % | 50 | % | ||||||||||||||||||||||||||||||||
| Mari E. Rodríguez | 78,239 | 2,150 | 78,239 | 2,150 | 156,477 | 50 | % | 50 | % | |||||||||||||||||||||||||||||||||||
| Threshold | Target | Maximum | ||||||||||||||||||
| Tangible book value | $ | 28.55 | $ | 30.37 | $ | 31.89 | ||||||||||||||
| 3-Year Average ROATCE | 14.01 | % | 14.90 | % | 15.65 | % | ||||||||||||||
Wethe Company, we have entered into a change-in-control compensation agreement with Mr. Fernández and Mr. Kumar pursuant to which the executive is entitled to a cash payment equal to two times the sum of his annual base salary and last cash bonus if there is a change in control compensation agreement with our CEO and COO. as a result thereof or within one year thereafter his employment is terminated.
Name | Change-in-Control Cash Compensation ($) | ||||||||||||||
José | 6,369,900 | ||||||||||||||
Ganesh Kumar | 2,031,800 | ||||||||||||||
| Submitted by: | ||
| JorgeColón-Gerena, Chairperson | ||
| Julian S. Inclán, Vice Chairperson | ||
| Annette Franqui | ||
Name José Rafael Fernández President & Chief Executive Officer Ganesh Kumar Senior Executive Vice President & Chief Operating Officer Maritza Arizmendi Executive Vice President & Chief Financial Officer Ramón Rosado-Linera Senior Vice President & Treasurer Cesar Ortiz Senior Vice President of Commercial Credit and Operations December 31, 2026, and therefore, Mr. Fernández's 2023 compensation was primarily governed by the 2021 Employment Agreement. employment times three for Mr. Fernández and times two for Mr. Kumar. Name José Rafael Fernández Ganesh Kumar Maritza Arizmendi Ramón Rosado-Linera César Ortiz computed in accordance with FASB ASC Topic 718. Name José Rafael Fernández 100,000 45,200 27,450 26,150 11,575 — — 9,150 26,150 34,725 1 2 3 11.950 11.830 14.520 16.100 17.440 12/03/2020 02/23/2022 01/22/2023 02/27/2024 02/24/2025 Total Ganesh Kumar 10,100 9,500 25,200 19,125 13,550 5,800 — — — 6,375 13,550 17,550 1 2 3 11.500 11.820 11.830 14.520 16.100 17.440 01/18/2020 01/21/2021 02/23/2022 01/22/2023 02/27/2024 02/24/2025 Total Maritza Arizmendi 1,500 4,500 3 17.440 02/24/2025 Total Ramón Rosado-Linera 5,500 6,450 1,500 1,500 — 2,150 3,000 4,500 1 2 3 11.830 14.520 16.100 17.440 02/23/2022 01/22/2023 02/27/2024 02/24/2025 Total César Ortiz 5,900 5,500 3,375 3,000 — — 1,125 3,000 1 2 11.820 11.830 14.520 16.100 01/21/2021 02/23/2022 01/22/2023 02/27/2024 Total Name José Rafael Fernández Ganesh Kumar Maritza Arizmendi Ramon Rosado-Linera César Ortiz 2023. Name José Rafael Fernández Ganesh Kumar Name Julian S. Inclán Juan C. Aguayo JorgeColón-Gerena Néstor de Jesús Rafael F. Martínez-Margarida Pedro Morazzani Radamés Peña28COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONNone of the members of the Compensation Committee has served as an officer or employee of the Company or any of its subsidiaries, nor did any of them have any relationship with the Company requiring disclosure under Item 404 of RegulationS-K of the SEC. None of our executive officers served as a director of another entity, or as a member of the compensation committee of another entity, one of whose executive officers served as a member of our Board of Directors or as a member of its Compensation Committee at any time during 2017.EXECUTIVE COMPENSATIONSummary Compensation TableThe following table summarizes the total compensation earned in each of the last three years by the Named Executive Officers.Summary Compensation Table Year Salary
($) Bonus
($)1 Stock
Awards
($)1 Option
Awards
($)1 Non-Equity
Incentive Plan
Compensation
($)2 All Other
Compensation
($) Total
($) 2017 865,000 283,333 312,040 — 760,100 95,552 3 2,313,025 2016 865,000 — — — 836,900 78,122 1,780,022 2015 865,000 — — 283,388 197,300 103,933 1,449,621 2017 475,000 335,667 — — 417,400 76,571 4 1,304,638 2016 475,000 — — — 459,600 115,037 1,049,637 2015 475,000 — 32,068 142,000 92,900 80,198 822,166 2017 259,309 — 67,250 — 116,900 16,792 5 460,251 2016 231,041 — — — 70,800 21,650 323,491 2015 230,963 — 6,976 36,724 45,900 23,483 344,046 2017 253,834 — 25,555 — 73,700 6,562 359,651 2016 253,833 — — — 75,200 8,554 337,587 2015 253,748 — 6,976 36,724 52,600 6,707 356,755 2017 250,000 — 25,555 — 67,900 22,118 6 365,573 2016 250,000 — — — 47,000 22,868 319,868 2015 250,000 10,000 — — 26,900 143,088 6 429,988 Name Year Salary
($)Bonus
($)Stock Awards ($)1Non-Equity Incentive Plan Compensation ($)2All Other
Compensation
($)Total
($)José R. Fernández 2023 935,000 — 1,197,394 1,188,300 168,781 3 3,489,475 President & Chief Executive Officer 2022 935,000 — 1,129,545 872,200 124,762 3,061,507 2021 935,000 — 1,082,452 878,700 124,685 3,020,837 Ganesh Kumar 2023 550,000 — 747,268 465,900 145,013 4 1,908,181 Chief Strategy Officer, U.S. Business 2022 700,000 — 373,634 523,100 121,521 1,718,255 2021 700,000 — 729,764 585,000 120,239 2,135,003 Maritza Arizmendi 2023 432,892 — 300,084 391,500 64,478 5 1,188,954 Chief Financial Officer 2022 393,750 — 264,955 289,600 53,334 1,001,639 2021 375,000 — 273,896 235,400 26,361 910,657 César Ortiz 2023 292,442 — 132,390 169,846 42,620 6 637,298 Chief Risk Officer 2022 273,807 — 80,881 123,100 38,215 516,003 2021 263,989 — 131,320 83,300 17,465 496,074 Mari Evelyn Rodríguez 2023 234,231 — 351,540 244,500 11,506 7 841,776 Chief Retail Banking Officer 1.The special bonus paid to our CEO and COO in 2017 include the special retention bonuses payable in 6 semiannual installments, and the annual installment of the special bonus awarded to our COO in lieu of an equity award in 2017. The value of equity awards is the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions that we made in the valuation of the option awards, please refer to the notes to our audited financial statements. During 2016, no equity awards were granted in light of the Company’s financial performance in 2015.1. The value of equity awards is the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions that we made in the valuation of the option awards, please refer to the notes to our audited financial statements. The Company does not grant option awards.2. The non-equity incentive plan payments for each year were made in the first quarter of the following year and intended as compensation for performance of the NEOs during the previous year, except for a $600 advance paid during the fourth quarter as a Christmas bonus.3. This amount represents $99,997 for reasonable personal expenses in the performance of Mr. Fernández’s duties, $44,392 for dividends paid on performance shares, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.4. This amount represents $100,499 for reasonable personal expenses in the performance of Mr. Kumar’s duties, $20,700 for dividends paid on performance shares, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.5. This amount represents $41,000 for reasonable personal expenses in the performance of Ms. Arizmendi’s duties, $10,350 for dividends paid on performance shares, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.6. This amount represents $20,000 for reasonable personal expenses in the performance of Mr. Ortiz’s duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of medical, life and disability insurance premiums.7. This amount represents the payment of reasonable personal expenses in the performance of Ms. Rodríguez's duties, and medical, life and disability insurance premiums.2.Thenon-equity incentive plan payments for each year were made in the first quarter of the following year and intended as compensation for performance of the NEOs during the previous year, except for $600 advanced in the last quarter of the applicable year as a Christmas bonus.3.This amount represents $85,000 for reasonable personal expenses in the performance of his duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of life and disability insurance premiums.4.This amount represents $70,465 for reasonable personal expenses in the performance of his duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of life and disability insurance premiums.5.This amount represents $8,000 for reasonable personal expenses in the performance of her duties, $3,462 for a car allowance, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of life and disability insurance premiums.6.This amount represents $20,000 for reasonable personal expenses in the performance of his duties, our matching contribution pursuant to our 401(k)/1081.01(d) Plan, and payment of life and disability insurance premiums. Mr. Ortiz agreed to cap his annual performance bonus and to stop receiving equity awards in exchange for a reimbursement by the Company of up to $90,000 in education expenses towards obtaining an executive M.B.A. For 2016, the cap on his bonus was increased from $30,000 to $50,000.The median of the annual total compensation of all employees of the Company, except the CEO, in 20172023 was $29,809,$33,531.89, and the ratio of the median of the annual total compensation of all employees of the Company to the annualAnnual total compensation of the CEO in 20172023 was 1:77.6.73. The median employee was selected as of December 31, 20172023 based on the total cash compensation (i.e., base salary and bonus) paid to its employees during 2017.20182023.29CEO Employment AgreementJosé Rafael Fernández entered into an amended and restated Employment Agreement with the Company on February 28, 2018December 21, 2023, effective on January 1, 2024 (the “2018“2024 Employment Agreement”), which replaced the Employment Agreement entered into on September 27, 2016 (the “2016employment agreement executed July 28, 2021 (as amended, the “2021 Employment Agreement”). Mr. Fernández is our President and Chief Executive Officer and the Vice Chairperson of our Board of Directors. The 20182024 Employment Agreement is effective as of March 1, 2018 and ends on June 30, 2021.As provided in the 20182021 and 2024 Employment Agreement,Agreements, Mr. Fernández reports directly to our Board of Directors and has overall responsibility for the business and affairs of the Company. During the term of the 20182021 and 2024 Employment AgreementAgreements and in any election of directors in which Mr. Fernández’s term as director is set to expire, the Board will nominate and recommend to the shareholders of the Company his election as a Board member and, if elected, will appoint him its Vice Chairperson.The 20182021 Employment Agreement provides that Mr. Fernández will be compensated as follows: (i) annual base salary of $865,000,$935,000, which may be increased by the Compensation Committee of our Board of Directors; (ii) annual target bonus of 100%a percentage, established by the Compensation Committee, of his annual base salary payable on or before March 31 of each year pursuant to the Company’snon-equity incentive bonus plan; (iii) annual expense allowance of $85,000$100,000 for hiscar-related expenses, membership expenses for social, business and professional organizations, and any other expenses which in his judgment are reasonably appropriate for the performance of his duties as President and Chief Executive Officer of the Company; (iv) a10-year term life insurance policy in the amount of $3,000,000 covering his life and having as beneficiaries his spouse and heirs or other beneficiaries designated by him; (v) 25 days of paid vacation per year; (vi) the remaining balance, $425,000, of a special bonus of $850,000 granted pursuant to the 2016 Employment Agreement will be payable in three equal semi-annual installments commencing on July 1, 2018; and (vii)(vi) additional incentive compensation under the Company’s equity based compensation plan based on his performance scorecard, as approved by the Company’s Compensation Committee, up to an annual amount equal to 85%a percentage, established by the Compensation Committee, of his annual base salary, but he may elect to receive the award in deferred cash equivalents if he is in compliance with the Company’s Stock Ownership Policy. It also provides that Mr. Fernández will be entitled to participate in any equity-based compensation plan, profit-sharing plan or other plans, benefits and privileges offered by the Company to its employees and executives to the extent that he is otherwise eligible and qualifies to participate in and receive such benefits or privileges.The 20182024 Employment Agreement had substantially the same terms and conditions as the 2021 Employment Agreement described above except that it (i) increased the target bonus percentage starting with the 2023 bonus payable in 2024 from 90% to 100%, (ii) increased his 2024 annual base salary to $981,750, and (iii) provided for a special one-time equity award of 40,442 restricted units and 40,442 performance shares to be granted in 2024.The 2021 and 2024 Employment Agreements provide that they may be terminated by our Board of Directors for “just cause” (as defined therein). In the event it is terminatedof termination for just cause or if Mr. Fernández is removed or barred from office under applicable law, he will have no right to compensation or other benefits for any period after such termination. However, if the 20182021 or 2024 Employment Agreement is terminated by our Board of Directors other than for just cause and other than in connection with a change in control of the Company (as defined in his Change in Control Compensation Agreement with the Company), or if Mr. FernandezFernández terminates the 20182021 or 2024 Employment Agreement for “good reason” (as defined therein), the Company will be required to pay him as severance, in lieu of any further compensation for periods subsequent to the date of termination, a lump sum equal to the product of (a) his annual base salary and bonus (equal to the average cash bonus paid to him in the last two fiscal years prior to the termination date), multiplied by (b) three.Change-in-Control Compensation AgreementsWe have entered intoChange-in-Control Compensation Agreements with José RafaelMr. Fernández and GaneshMr. Kumar. Each agreement remains in full force as long as the person is employed by us.Under the agreements, the aforementioned personsthey are entitled to certain cash payment compensation in the event there is a “change in control of the Company” and as a result thereof or within one year after the change in control, the person’s employment is terminated by us or our successor in interest. The cash compensation will be an amount equal to two times the sum of such person’s annual base salary at the time the termination of his or her employment occurs and his or her last cash bonus paid prior to the termination of his or her employment.30For purposes thereof, a change in control is deemed to have occurred if (i) any person or entity (including a group) acquires direct or indirect ownership of 50% or more of the combined voting power of the Company’s then outstanding common stock as a result of a tender or exchange offer, open market purchases, privately negotiated purchases or otherwise; or (ii) the shareholders of the Company approve (a) any consolidation or merger of the Company in which the Company is not the surviving corporation (other than a merger in which the holders of the Company’s common stock immediately prior to the merger have the same or substantially the same proportionate ownership of the surviving corporation immediately after the merger), or (b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the Company’s assets to an entity which is not a wholly-owned subsidiary of the Company.Life InsuranceWe provide each of our NEOs with a life insurance policy, which in the event of death would pay his or her heirs or beneficiaries up to a maximum of $700,000 or, if the NEO qualifies, $1,000,000. We also provide our CEO with an additional key man life insurance policy, which in the event of his death would pay $3 million to his heirs or beneficiaries.401(k)/1081.01(d) PlanAll of the Company’s employees, including the employees of its subsidiaries, are eligible to participate in our cash or deferred arrangement profit sharing plan (the “401(k)/1081.01(d) Plan”). The 401(k)/1081.01(d) Plan is a defined contribution plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and is qualified under Sections 1081.01(a) and 1081.01(d) of the Puerto Rico Internal Revenue Code of 2011, as amended (the “Puerto Rico Internal Revenue Code”). The 401(k)/1081.01(d) Plan offers eligible participants several investment alternatives, including several U.S. mutual funds, a money market account, and shares of common stock of the Company. Contributions made through payroll deductions not in excess of a specified amount may be accumulated per year asbefore-tax savings. TheDuring 2023, the Company contributescontributed 50% of the employee’s contribution up to a maximum employee contribution for matching purposes of 4%8% of the employee’s salary. The matching contribution is invested in accordance with the employee’s election, which may be shares of common stock of the Company.Grants of Plan-Based AwardsThe following table presents the estimated possible payouts under ournon-equity incentive awards, which reflect cash incentives pursuant to our annual bonus plan. During 2017, fEstimated Future Payouts under Non-Equity Incentive Plan Awards1Estimated Future Payouts under
Equity Incentive Plan AwardsNumber of
Shares of UnitsGrant
Date Fair
Value of
Equity AwardsName Grant Date Threshold ($) Target ($) Max ($) Threshold ($) Target ($) Max ($) (#) ($)2José R. Fernández 935,000 2/21/2023 20,350 598,697 2/21/2023 $ 299,349 $ 598,697 $ 898,046 20,350 598,697 Ganesh Kumar 385,000 2/21/2023 12,700 373,634 2/21/2023 $ 186,817 $ 373,634 $ 560,451 12,700 373,634 Maritza Arizmendi 308,000 2/21/2023 5,100 150,042 2/21/2023 $ 75,021 $ 150,042 $ 225,063 5,100 150,042 César Ortiz 295,920 2/21/2023 2,250 66,195 2/21/2023 $ 33,098 $ 66,195 $ 99,293 2,250 66,195 Mari Evelyn Rodríguez 175,000 5/1/2023 10,500 263,655 5/1/2023 $ 43,943 $ 87,885 $ 131,828 3,500 87,885 1. Pursuant to our non-equity incentive plan, there wereare no grantsthreshold or maximum payouts.2. Grant date fair value of equity awards under the Omnibus Plan made to the Named Executive Officers. Estimated Possible Payouts under Non-
Equity Incentive Plan Awards1 Number
of
Shares Number of
Securities Grant
Date Fair
Value of
Equity Grant
Date Threshold
($) Target
($) Maximum
($) of Units
(#) Underlying
Options (#) Awards
($)2 — 605,500 865,000 1,081,250 — — — 02/22/2017 — — — 23,200 — 312,040 — 332,500 475,000 593,750 — — — — 90,758 129,655 162,068 — — — 02/22/2017 — — — 5,000 — 67,250 — 53,305 76,150 95,188 — — — 02/22/2017 — — — 1,900 — 25,555 — 52,500 75,000 93,750 — — — 02/22/2017 — — — 1,900 — 25,555 1.The “Threshold” column assumes that the executive meets the minimum performance threshold of 70 for each metric in his or her scorecard, the “Target” column assumes a performance score of 100, and the “Maximum” column assumes a maximum performance score of 125.2.Grant date fair value of awards computed in accordance with FASB ASC Topic 718.31Outstanding Equity Awards at Fiscal Year EndThe following table presents information concerning unexercised stock options of each Named Executive Officer outstanding as of December 31, 2017.Option Awards Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable Number of Securities
Underlying
Unexercised Options
(#) Unexercisable Option
Exercise
Price ($) Option
Expiration
Date 31,700 — 11.500 01/18/2020 242,075 70,025 1,493 — 8.280 04/28/2019 84,768 37,475 3,000 3,000 2 16.100 02/27/2024 4,500 7,500 2,400 — 11.820 01/21/2021 17,350 9,650 5,900 — 11.500 01/18/2020 23,675 4,125 1.The unexercisable shares underlying these options fully vest on January 22, 2018.2.Half of the unexercisable shares underlying these options vest annually on February 27 until fully vesting in 2019.3.One third of the unexercisable shares underlying these options vests annually on February 24 until fully vesting in 2020.The following table presents information concerning restricted stock units and performance shares of Named Executive Officers that were outstanding and subject to the restricted period or the performance cycle as of December 31, 2017.Stock AwardsName Number of Shares or
Units of Stock
That Have Not
Vested (#)Market Value
of Shares or Units of
Stock That Have
Not Vested ($)Number of
Unearned Shares or Units
of Stock That
Have Not
Vested (#)Market Value
of Unearned
Shares or Units of Stock
That Have Not
Vested ($)José R. Fernández 147,642 1 5,533,622 — — Ganesh Kumar 94,818 2 3,553,779 — — Maritza Arizmendi 36,426 3 1,365,246 — — César Ortiz 15,184 4 569,096 — — Mari Evelyn Rodríguez 15,750 5 590,310 — — Name1. The restricted periods lapse annually in thirds commencing on February 21, 2024 for 20,350 restricted units, annually in halves commencing on February 22, 2024 for 13,500 restricted units, and on February 17, 2024 for 9,617 restricted units. The performance cycles end on December 31, 2023 for 28,850 performance shares, on December 24, 2024 for 20,250 performance shares, and on December 31, 2025 for 20,350 performance shares.2. The restricted periods lapse annually in thirds commencing on February 21, 2024 for 12,700 restricted units, annually in halves commencing on February 22, 2024 for 8,434 restricted units, and on February 17, 2024 for 6,484 restricted units. The performance cycles end on December 31, 2023 for 19,450 performance shares, on December 31, 2024 for 12,650 performance shares, and on December 31, 2025 for 12,700 performance shares.3. The restricted periods lapse annually in thirds commencing on February 21, 2024 for 5,100 restricted units, annually in halves commencing on February 22, 2024 for 3,167 restricted units, and on February 17, 2024 for 2,434 restricted units granted in 2021. The performance cycles end on December 31, 2023 for 7,300 performance shares, on December 31, 2024 for 4,750 performance shares, and on December 31, 2025 for 5,100 performance shares.4. The restricted periods lapse annually in thirds commencing on February 21, 2024 for 2,225 restricted units, annually in halves commencing on February 22, 2024 for 967 restricted units, and on February 17, 2024 for 1,167 restricted units. The performance cycles end on December 31, 2023 for 3,500 performance shares, on December 31, 2024 for 1,450 performance shares, and on December 31, 2025 for 2,250 performance shares.5. The restricted periods lapse annually in thirds commencing on May 1, 2024 for 10,500 restricted units. The performance cycle ends on December 31, 2025 for 3,500 performance shares.Number of Shares orUnits of Stock ThatHave Not Vested (#)Market Value of Sharesor Units of Stock ThatHave Not Vested ($)José Rafael Fernández23,2001218,080Ganesh Kumar1,900217,860Maritza Arizmendi5,400350,760Ramón Rosado-Linera2,300421,620César Ortiz1,900517,8601.The restricted period lapses on February 22, 2020 with respect to the award of 23,200 restricted stock units.2.The restricted periods lapse on February 24, 2018 with respect to the award of 700 restricted stock units and on March 27, 2018 with respect to the award of 1,200 restricted stock units.3.The restricted periods lapse on February 24, 2018 with respect to the award of 400 restricted stock units and on February 22, 2020 with respect to the award of 5,000 restricted stock units.4.The restricted periods lapse on February 24, 2018 with respect to the award of 400 restricted stock units and on February 22, 2020 with respect to the award of 1,900 restricted stock units.5.The restricted period lapses on February 22, 2020 with respect to the award of 1,900 restricted stock units.Option Exercises and Stock VestedThe following table only presents information for the Named Executive Officers who acquired stock upon the exercise of an option award and upon the lapse of the restricted period of a restricted unit award in 2017.Option Exercises and Stock Vested Option Awards Stock Awards Number of
Shares Acquired
on Exercise (#) Value Realized
on Exercise ($) Number of
Shares Acquired
on Vesting (#) Value Realized
on Vesting ($) — — — — — — 1,200 15,720 — — 600 7,860 — — 600 7,860 — — 600 7,860 Option Awards Stock Awards Name Number of
Shares Acquired
on ExerciseValue Realized on Exercise ($)1Number of
Shares Acquired
on VestingValue Realized
on Vesting ($)José R. Fernández 98,600 1,174,536 55,684 1,618,649 Ganesh Kumar 75,800 1,138,518 29,033 844,484 Maritza Arizmendi 12,000 203,280 13,183 383,229 César Ortiz — — 4,767 138,584 Mari Evelyn Rodríguez — — — — 1. The value is based on the closing price of a share of the Company’s common stock on the exercise date minus the exercise price of the option.32Non-Qualified Deferred CompensationThe following table presents information concerning the deferral of compensation by the Named Executive Officers on a basis that is nottax-qualified.Non Qualified Deferred Compensation Executive
Contributions
in Last FY ($)1 Registrant
Contributions
in Last FY ($) Aggregate
Earnings
in Last
FY ($)2 Aggregate
Withdrawals/
Distributions
($) Aggregate
Balance
at Last
FYE ($) 1,072,601 — 5,577 — 1,086,552 820,117 9,276 — 1,229,746 Name Executive
Contributions
in Last FY ($)1Registrant
Contributions
in Last FY ($)Aggregate
Earnings
in Last
FY ($)2Aggregate
Withdrawals/
Distributions
($)Aggregate
Balance
at Last
FYE ($)José R. Fernández — — 79,176 1,496,040 1,496,917 Ganesh Kumar — — 94,371 1,769,292 1,770,531 César Ortiz 600 — 1,945 55,574.45 54,995 1.Such executive contributions are reported in the Summary Compensation Table.1. Such executive contributions are reported in the Summary Compensation Table.2. These earnings are not reported in the Summary Compensation Table.2.These earnings are not reported in the Summary Compensation Table.The Company offers our executive officers anon-qualified deferred compensation plan, where such executives are allowed to defer taxable income. The plan is not intended to meet the requirements of Section 1081.01 of the Puerto Rico Internal Revenue Code, and therefore, does not meet the funding, employee coverage, and other requirements which “qualified retirement plans” must satisfy thereunder.However, the plan is intended to constitute an unfunded arrangement maintained “primarily for the purposes of providing deferred compensation for a select group of management or highly compensated employees” for purposes of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Under the plan, the executive’s current taxable income is reduced by the amount being deferred, which may be up to 100% of his or her salary and bonus. Funds contributed thereto can accumulateThe compensation due from the Company to the executive pursuant to the non-qualified plan may increase or decrease in value based on the performance of certain notional investment options selected by the executive. The deferred compensation obligations due to the executive may increase in value without current income tax to the individual. Taxes are due when the funds are withdrawn at the then current income tax rate applicable to the individual, which may be lower than his or her current income tax bracket.33Pay versus Performance TableThe following table presents the compensation of our CEO, which is our principal executive officer, and our other NEOs, together with the cumulative shareholder return of the Company and the S&P U.S. BMI Banks Index, the Company’s net income and the Company’s tangible book value, which is in our assessment the most important financial performance measure used to link compensation actually paid our NEOs for the most recently completed fiscal year.Value of Initial Fixed $100 Investment Based On: Year Summary Compensation Table Total for PEO ($)1 Compensation Actually Paid to PEO ($)1 Average Summary Compensation Table Total for Non-PEO NEOs2 Average Compensation Actually Paid to Non-PEO NEOs2 Total Shareholder Return Peer Group Total Shareholder Return Net Income ($000) Company Selected Measure: Earnings per Share ($) 2023 3,489,475 6,543,352 1,144,052 1,674,912 174.51 107.32 181,172 3.85 2022 3,061,507 3,454,638 984,232 1,324,122 124.45 98.38 166,239 3.46 2021 3,020,837 4,895,781 1,030,974 1,653,106 116.81 118.61 146,151 2.85 2020 2,782,700 2,757,366 896,370 918,979 80.21 87.24 74,327 1.32 1. Our CEO, Mr. José R. Fernández, was the PEO in each year. In 2020, 2021, 2022, and 2023, $4,265,707, $4,113,982, $4,475,595, and $4,505,720, respectively, were deducted from the Summary Compensation Table Totals, which represent the grant date fair value of the equity awards he received in the corresponding fiscal year, and the fair value of unvested equity awards and dividends accrued on unvested performance shares as of the end of the immediately preceding fiscal year; and $4,240,373, $5,988,926, $4,868,726, and $6,392,586, respectively, were added, which represent the fair value as of the vesting date of awards that vest during the corresponding fiscal year and the fair value of all unvested equity awards and dividends accrued on unvested performance shares as of the end of the corresponding fiscal year .2. Mr. Ganesh Kumar, Ms. Maritza Arizmendi, and Mr. César Ortiz were Non-PEO NEOs in each year. The fourth Non-PEO NEOs was Ms. Mari E. Rodríguez in 2023, Mr. Patrick Haggarty in 2022, and Mr. José Cabrera in 2020 and 2021. In 2020, 2021, 2022, and 2023, $841,687, $946,806, $1,128,567, and $1,197,314, respectively, were the averages deducted from the Summary Compensation Table Totals, which represent the grant date fair value of the equity awards received in the corresponding fiscal year and the fair value of unvested equity awards and dividends accrued on unvested performance shares as of the end of the immediately preceding fiscal year; and $864,296, $1,507,653, $1,226,607, and $2,246,340, respectively, were the averages added, which represent the fair value as of the vesting date of awards that vest during the corresponding fiscal year and the fair value of all unvested equity awards and dividends accrued on unvested performance shares as of the end of the corresponding fiscal year .The following graph presents the relationship between executive compensation actually paid by the Company to our CEO and the average compensation actually paid to the NEOs other than our CEO and the of the Company’s cumulative total shareholder return over the past four years. It also compares our Company’s cumulative total shareholder return with that of our peer group over the same period.
34The following graph presents the relationship between compensation actually paid by the Company to our CEO and the average compensation actually paid to the NEOs other than our CEO and the Company’s net income over the past four years.
The following graph presents the relationship between compensation actually paid by the Company to our CEO and the average compensation actually paid to the NEOs other than our CEO and the Company’s earnings per share over the past four years.
The most important financial performance metrics used by the Company in our most recent fiscal year to link our NEOs compensation to our Company’s performance are earnings per share, tangible book value, average return on average tangible common equity, market share operating income, and efficiency ratio.35Director CompensationEach director’s compensation is generally designed to be competitive with comparable compensation paid to directors at peer group companies in Puerto Rico and the U.S. However, each director’s actual compensation varies based on whether he or she is a Chairperson of our Board of Directors or any of its committees. It also varies depending on the number of meetings attended and on his or her membership in Board committees.The following table presents information concerning the compensation of our directors for 2017. Fees Earned
or Paid in
Cash ($) Stock
Awards
($)1 Option
Awards
($)1 All Other
Compensation
($) Total
($) 123,000 51,110 2 — — 174,110 67,871 20,175 3 — — 88,046 65,471 18,830 4 — — 84,301 60,971 16,140 5 — — 77,111 64,621 24,210 6 — — 88,831 86,671 25,555 7 — — 112,226 50,771 14,795 8 — — 65,566 Directors Fees Earned
or Paid in
Cash ($)Stock Awards ($)1Option Awards ($)1All Other
Compensation ($)Total ($) Julian S. Inclán 137,000 63,700 2 — — 200,700 Jorge Colón-Gerena 72,000 43,316 3 — — 115,316 Néstor de Jesús 79,000 43,316 4 — — 122,316 Annette Franqui 60,000 15,288 5 — — 75,288 Susan Harnett 65,000 43,316 6 — — 108,316 Rafael Vélez 72,000 43,316 7 — — 115,316 Angel Vázquez 58,333 — 58,333 Edwin Pérez 133,479 8 133,487 1.Aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718.1. Aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718.2. The aggregate amount of restricted stock units outstanding at the end of 2023 is 8,100.3. The aggregate amount of restricted stock units outstanding at the end of 2023 is 5,500.4. The aggregate amount of restricted stock units outstanding at the end of 2023 is 5,500.5. The aggregate amount of restricted stock units outstanding at the end of 2023 is 600.6. The aggregate amount of restricted stock units outstanding at the end of 2023 is 5,500.7. The aggregate amount of restricted stock units outstanding at the end of 2023 is 2,100.8. In May 2023, Mr. Edwin Pérez was awarded a cumulative sum encompassing deferred service fees in connection with the end of his service as director.2.The aggregate amount of restricted stock units outstanding at the end of 2017 is 6,900.3.The aggregate amount of restricted stock units outstanding at the end of 2017 is 3,100.4.The aggregate amount of restricted stock units outstanding at the end of 2017 is 1,900.5.The aggregate amount of restricted stock units outstanding at the end of 2017 is 1,200.6.The aggregate amount of restricted stock units outstanding at the end of 2017 is 3,200.7.The aggregate amount of restricted stock units outstanding at the end of 2017 is 3,900.8.The aggregate amount of restricted stock units outstanding at the end of 2017 is 1,800.ExceptThe Compensation Committee approved the compensation program for Julian Inclán, Chairperson of the Board,our directors. Pursuant to such program, eachnon-employee director receives an annual retainer of $32,004, payable in equal monthly installments in advance, plus a fee of $1,000 for each Board meeting attended in person and $850 for each committee meeting attended in person (other than a committee presided by any such director and$60,000, except for members of Oriental Bank’s Trust Committee who receive $500 for each committee meeting attended in person). Furthermore, the Chairperson of the Audit Committee receives an additional annual retainer of $36,000, and the Chairpersons of the Risk and Compliance Committee, the Compensation Committee and the Corporate Governance and Nominating Committee each receives an additional annual retainer of $12,000. Such retainers are payable in equal monthly installments. In 2017, director’s compensation increased as a result of the payment in December 2017 of the retainers due for their service in January 2018.As Chairperson of the Board, Mr. Inclánwho receives an annual retainer of $112,000, payable in equal monthly installments in advance, plus$130,000. Non-employee directors serving on Oriental Bank’s Board of Directors receive a fee of $1,000 for each Board meeting attended. Furthermore, the Chairpersons of the Audit Committee and the Risk and Compliance Committee receive an additional annual retainer of $12,000, and the other members of such committees (other than the Board and Committee Chairpersons) receive an additional annual retainer of $5,000. Such retainers are payable in equal monthly installments in advance. The Compensation Committee also established that each non-employee director will be awarded restricted units with a value of $40,000, except for the Chairperson of the Board, who will be awarded restricted units with a value of $60,000.The President and CEO, who is Vice Chairperson of the Board, does not receive director’s fees and is compensated exclusively pursuant to his 2018 Employment Agreement, which is described above under the subheading “2018“CEO Employment Agreement.”36PROPOSAL 3: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMThe Audit Committee of our Board of Directors has selected KPMG LLP (“KPMG”) as our independent registered public accounting firm for 2024 and has further directed that the selection of such firm be submitted for ratification by the shareholders at this annual meeting. KPMG has served as our independent registered public accounting firm since 2005. Neither our articles of incorporation nor our by-laws require that our shareholders ratify the selection of such firm. If our shareholders do not ratify the selection, the Audit Committee will reconsider whether or not to retain KPMG, but may nonetheless retain it. Even if the selection is ratified, the Audit Committee, in their discretion, may change the appointment at any time during the year if they determine that such change would be in our best interest.Our Board of Directors recommends that you vote “FOR” this proposal.INDEPENDENT AUDITORKPMG served as our independent registered public accounting firm for the year ended December 31, 2023. The services that KPMG provided to the Company and its subsidiaries included the examination of our consolidated financial statements, limited revisions of our quarterly reports, audits of some of our subsidiaries, audits of our employee benefits plan, services related to our filings with the SEC and other regulatory agencies, and consultations on various tax and accounting matters.The Audit Committee reviewed and approved all audit and non-audit services rendered by KPMG to the Company and its subsidiaries and concluded that the provision of such services was compatible with the maintenance of KPMG’s independence in the conduct of its auditing functions. The Audit Committee has adopted a pre-approval policy regarding the procurement of audit and non-audit services, which is available on our website at www.ofgbancorp.com. The Audit Committee intends to review such policy periodically.The aggregate fees billed by KPMG for the years ended December 31, 2023 and 2022 for the various services provided to the Company and its subsidiaries were as follows:Type of FeesYear Ended
December 31,
2023 ($)Year Ended
December 31,
2022 ($)Audit Fees 1,411,700 1,324,700 Audit-Related Fees 123,800 117,800 Tax Fees — All Other Fees 1,780 1,780 1,537,280 1,444,280 As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements, including the audit of our internal control over financial reporting, and review of financial statements included on our Forms 10-Q, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those years; (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements; (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.”37AUDIT COMMITTEE REPORTThe Audit Committee assists the Board of Directors in its oversight of the financial reporting process of OFG Bancorp (the “Company”), and meets regularly with the Company’s internal and external auditors, CEO and CFO. The Audit Committee’s responsibilities are more fully described in its charter, a copy of which is available on the Company’s website atwww.ofgbancorp.com.Management has the primary responsibility for the preparation and integrity of the Company’s financial statements, accounting and financial reporting principles, and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America.In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed the audited financial statements for the period ended December 31, 20172023 with the Company’s management and has discussed with KPMG LLP (“KPMG”) the matters that are required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA,Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, KPMG has provided the Audit Committee with the written disclosures and the letter required by the Independence Standards Board Standard No. 1,Independence Discussions with Audit Committees, as adopted by the Public Company Accounting Oversight Board in Rule 3600T, and the Audit Committee has discussed with KPMG their independence.The members of the Audit Committee are not engaged professionally in rendering, auditing or accounting services on behalf of the Company nor are they Company employees. The Company’s management is responsible for its accounting, financial management and internal controls. As such, it is not the duty or responsibility of the Audit Committee or its members to conduct “field work” or other types of auditing or accounting reviews or procedures.Based on such reviews and discussions, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s annual report onForm 10-K for the year ended December 31, 2017,2023, for filing with the Securities and Exchange Commission.Submitted by: Submitted by:Pedro Morazzani,Rafael Vélez, ChairpersonRafael F. MartínezJorgeColó n-Gerenan Gerena, Vice ChairpersonJulian S. Inclán Angel Vázquez
that there is a compelling business reason to approve the transaction, taking into account all pertinent factors, (ii) it has been fully informed of any and all significant conflicts that may exist or otherwise arise on account of the transaction, and (iii) it reasonably believes that the transaction is beneficial for the Company and that it has adopted appropriate measures to manage the potential conflicts of interest. All Related Party Transactions approved or ratified by the Directors determined that such transaction does not affect Mr. Julian Inclán’s independence as a member of the Board. reports, except for Mari Evelyn Rodríguez, who filed a late Form 3, and Edwin Pérez, Patrick Haggarty and César Ortiz, who each failed to timely file a Form 4. shareholder proposes to bring before the annual meeting (i) a brief description of the matter or proposal desired to be brought before the meeting, (ii) the name and address of the shareholder, as it appears on our books, (iii) a representation that the shareholder is a holder of our shares of stock entitled to vote (indicating the class and number of shares) and intends to appear in person or by proxy at the meeting to bring up the matter or proposal, and (iv) any material interest of the shareholder in such matter or proposal.38INDEBTEDNESS OF MANAGEMENTCertain transactions involving loans were transacted in 20172023 between the Company’s banking subsidiary, Oriental Bank, some of our directors and executive officers, including those of our other subsidiaries, and persons related to or affiliated with such persons. All such transactions were made in the ordinary course of business on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with persons not related to the lender, and did not involve more than the normal risk of collectability or present other unfavorable features. At present, none of the loans to such directors and executive officers, including persons related to or affiliated with such persons, isnon-performing.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSOur Board of Directors recognizes that certain transactions present a heightened risk of conflicts of interest and/or improper valuation (or the perception thereof) and, therefore, has adopted a Related Party Transactions Policy (the “Policy”). For these purposes, a “Related Party Transaction” is defined as a transaction or series of similar transactions in which the Company or any of its subsidiaries is to be a participant and the amount involved exceeds $120,000, and in which any Related Party has or will have a direct or indirect material interest. A “Related Party” is any of our directors or executive officers, any nominee for director, any beneficial owner of more than 5% of any class of our voting securities, and any immediate family member of any of the previously mentioned. The Policy generally covers any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships between the Related Party and the Company. Related Party Transactions thereunder are approved or ratified by the Risk and Compliance Committee or the disinterested members of our Board of Directors (other than employment or compensation arrangements, which are approved by the Compensation Committee or the disinterested members of our Board of Directors). Furthermore, the Risk and Compliance Committee may approve or ratify a Related Party Transaction if (i)it findsAuditRisk and Compliance Committee must be disclosed to our Board of Directors at its next regularly scheduled meeting.Delgado & Fernández, LLP, San Juan, Puerto Rico, has continuously provided legal and notarial services to the Company since 1997 in the areas of mortgage lending, mortgage foreclosures and debt recovery, general legal advice, and commercial and labor litigation and arbitration. The brother of José Rafael Fernández, our President and CEO, is athe principal partner at that firm. The Company engaged Delgado & Fernández before Mr. Fernández became our President and CEO and a member of our Board of Directors. During 2017,2022, the Company paid such firm a total of $1,640,388$1,765,497 for legal services rendered to us.In January 2008,us and $557,651.00 for notarial services in connection with loan closings paid for by clients of the Company engaged the legal servicesCompany.The engagement of Carlos O. Souffront LLC, Dorado, Puerto Rico. Pursuant to this engagement, Carlos O. Souffront, Esq., serves as our General Counsel. As consideration for his services provided in 2017, the Company paid $695,420 to that firm. The Company also awarded Mr. Souffront 12,900 restricted stock units in 2017. He is also the Secretary ofDelgado & Fernández, LLP was approved by our Board of Directors.In August 2017, theThe Company’s bank subsidiary executed subscription documents forentered into a proposedcommitment to make an equity investment in a Delaware limited partnership (the “Partnership”) that is expected to be licensed as a small business investment company (an “SBIC”) by the U.S. Small Business.Business Administration. An equity investment by the bank in an SBIC is presumed qualified for purposes of the U.S. Community Reinvestment Act.The Partnership is managed by a Puerto Rico limited liability company, as general partner, which is led by a group of investment professionals, including Eduardo M. Inclán, who is the son of the Chairperson of our Board of Directors. The bank, as limited partner, has committed to the Partnership the lesser of $3 million or 15% of the total amount committed by all the partners at the closing of the Bank’s commitment or $2 million.partners. The general partner, and/or its affiliates are expectedincluding Eduardo Inclán, committed $500,000, which will represent 2.5% to commit an aggregate of 5%3.5% of the Partnership’s private capital (upcapital. In addition, a company in which Mr. Julian Inclán, Chairperson of our Board of Directors, owns 50% and his brother and nephew own the remaining 50% committed $250,000 to $2.5 million).the Partnership. This transaction was approved by all disinterested members of the Company’s Board of Directors. As of December 31, 2017,Directors and the bank has not yet purchased any interest in the Partnership.The engagements of Delgado & Fernández, LLP and Carlos O. Souffront LLC were approved by our Board of Directors.39SECTION 16(a)16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE,Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our equity securities to timely file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. We are required to identify any such director, executive officer or greater than 10% stockholder who failed to timely file any such report. Based solely on the review of copies of such reports and other information furnished to the Company by such individuals, we believe that during and with respect to 20172023 such persons timely filed all required reports.SHAREHOLDER PROPOSALSUnder our bylaws, business may only be brought before an annual meeting of shareholders if it is specified in the notice of the meeting or any supplement thereto given by or at the direction of our Board of Directors, or otherwise properly brought before the meeting by a shareholder. For business to be properly brought before an annual meeting by a shareholder, the shareholder must have given written notice to the Secretary of our Board of Directors not later than 120 days prior to the anniversary date of the mailing of our proxy materials in connection with the immediately preceding annual meeting of shareholders. The notice must set forth as to each matter that theShareholders may nominate candidates to our Board of Directors by delivering notice to our Secretary not later than 120 days prior to the anniversary of the date of the mailing of our proxy materials in connection with the immediately preceding annual meeting of shareholders. The notice must include: (i) the name and address of the stockholder who makes the nomination; (ii) a representation that the stockholder is a holder of the Company’s shares of stock entitled to vote and that it intends to appear in person or by proxy at the meeting; (iii) a description of any understandings between the stockholder and the nominee; (iv) any other information regarding the nominee that is required under the proxy rules of the Securities and Exchange Commission; and (v) the written consent of the nominee to serve as director if elected. The bylaws require that ballots bearing the names of all persons nominated by the Board of Directors and by shareholders be provided for use at the annual meeting.The requirements set forth in the preceding paragraph are separate from and in addition to the SEC requirements that a shareholder must meet in order to have a shareholder proposal included in our proxy statement.Shareholder proposals intended to be presented at the 20192025 annual meeting of shareholders must be set forth in writing and received by the Secretary of our Board of Directors, OFG Bancorp, P.O. Box 195115, San Juan, Puerto Rico 00919-5115, no later than the close of business on November 15, 2018.40ANNUAL REPORTSThis proxy statement is accompanied by our annual report on Form10-K, which is our annual report to shareholders for the fiscal year. The annual report is not part of the proxy solicitation materials.Upon receipt of a written request, we will furnish to any shareholder, without charge, a copy of our 20172023 annual report onForm 10-K, including the financial statements and schedules, and a list of the exhibits thereto required to be filed with the SEC under the Exchange Act. Such written request should be directed to OFG Bancorp, Investor Relations c/o254 Muñoz Rivera Avenue, San Juan, PR 00918; Email: Gary Fishman at gfishman@ofgbancorp.com or Steven Anreder & Company, 10 E. 40th Street, Suite 1308, New York, NY 10016;at sanreder@ofgbancorp.com; Telephone: (212)532-3232 or (800)421-1003; Facsimile: (212)679-7999;E-mail: ofg@anreder.com. 532-3232.BY ORDER OF THE BOARD OF DIRECTORS Julian S. Inclán Chairperson
27, 2024
APPENDIX A
PROPOSED AMENDMENT
THE CERTIFICATE OF INCORPORATION
RESOLVEDVIEW MATERIALS & VOTE OFG BANCORP C/O AMERICAN STOCK TRANSFER & TRUST CO. 6201 15TH AVENUE BROOKLYN, NY 11219 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/OFG2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. D99395-P86874 OFG BANCORP For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), that uponmark "For All Except" and write the filingnumber(s) of the Certificate of Amendment withnominee(s) on the Secretary of State of the Commonwealth of Puerto Rico, Article Eighth of the Certificate of Incorporation of OFG Bancorp (the “Corporation”) be amended in its entirety so that it reads as follows:
“EIGHTH: For the management of the business and for the conduct of the affairs of the Corporation, and in further creation, definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders, it is further provided:
1.Directors and Number of Directors. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors. The number of directors of the Corporation shall be fixed by, or in the manner provided in, theby-laws. The directors of the Corporation need not be stockholders.
2.Classification and Term.line below. The Board of Directors other than those who may be elected byrecommends that you vote FOR ALL of the holders of any class or series of stock having preference over the Common Stock asfollowing: 1. To elect seven directors to dividends or upon liquidation, shall be divided into three classes as nearly equal in number as possibleserve until the 2019 annual meeting2024 Annual Meeting of stockholders, with one class to be elected annually. The term of office of the initial directors shall be as follows: the term of directors of the first class shall expire at the first annual meeting of stockholders after the effective date of this Certificate of Incorporation; the term of office of the directors of the second class shall expire at the second annual meeting of stockholders after the effective date of this Certificate of Incorporation;Shareholders and the term of office of the third class shall expire at the third annual meeting of stockholders after the effective date of this Certificate of Incorporation; and, as to directors of each class, whenuntil their respective successors are duly elected and qualified. At each annual meeting of stockholders until the 2019 meeting, directors elected to succeed those whose terms are expiring shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders and when their respective successors are elected and qualified.
At the 2019 annual meeting of stockholders, the term of office of all classes of directors shall expire. Effective as of the date of the 2019 annual meeting of stockholders, the classification of the Board of Directors shall be eliminated, and all directors thereafter shall be elected annually.
3.Cumulative Voting. At each annual meeting of stockholders in which more than one director is being elected, every stockholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by the stockholder for as many persons as there are directors to be elected and for whose election the stockholder has a right to vote, or to cumulate the votes by giving one candidate as many votes as the number of such directors to be elected multiplied by the number of his shares shall equal, or by distributing such votes on the same principle among any number of candidates.
4.Vacancies. Except as otherwise fixed pursuant to the provisions of Article FOURTH hereof relating to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect directors, any vacancy occurring in the Board of Directors, including any vacancy created by reason of an increase in the number of directors, may be filled by a majority vote of the directors then in office, whether or not a quorum is present, or by a sole remaining director, and any director so chosen shall hold office for the remainder of the term to which the director has been selected and until such director’s successor shall have been elected and qualified. When the number of directors is changed prior to the 2019 annual meeting of stockholders, the Board of Directors shall determine the class or classes to which the increased or decreased number of directors shall be apportioned; provided that no decrease in the number of directors shall shorten the term of any incumbent director.
5.Removal. Subject to the rights of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation to elect directors, any director (including persons elected by directors to fill vacancies in the Board of Directors) may be removed from office only with cause by an affirmative vote of not less than a majority of the votes eligible to be cast by stockholders at a duly constituted meeting of stockholders called expressly for such purpose.
6.By-Laws.qualified: Nominees: 01) Julian S. Inclán 02) José Rafael Fernández 03) Jorge Colón-Gerena 04) Néstor de Jesús 05) Annette Franqui 06) Susan Harnett 07) Rafael Vélez For Against Abstain For Abstain Against The Board of Directors is expressly authorized and empowered to make, alter and repealrecommends that you vote FOR theby-laws of the Corporation, subject to the power of the stockholders to alter or repeal theby-laws made by the Board of Directors. Such action by the following: The Board of Directors shall requirerecommends that you vote FOR the affirmative vote of a majorityfollowing: 2. To approve, on an advisory basis, the compensation of the directors thenCompany's Named Executive Officers as set forth in office at any regular or special meeting of the Board of Directors. Such action byaccompanying Proxy Statement. 4. To amend the stockholders shall require the affirmative vote of the holders of a majority of the shares of the Corporation entitled to vote generally in an election of directors, voting together2007 Omnibus Performance Incentive Plan, as a single class, as well as such additional vote of the preferred stock as may be required by the provisions of any series thereof.”
RESOLVED, that upon the filing of the Certificate of Amendment with the Secretary of State of the Commonwealth of Puerto Rico, Article Tenth of the Certificate of Incorporation of the Corporation be deleted in its entirety.
RESOLVEDFURTHER, that the proper officers of the Corporation be,amended and hereby are, authorized and directed to take all actions, execute all instruments, and make all payments that are necessary or desirable, at their discretion, to make effective the foregoing amendment to Articles Eighth and Tenth of the Certificate of Incorporation of the Corporation, including, without limitation, the filing of a certificate of amendment with the Secretary of State of the Commonwealth of Puerto Rico, unless therestated. The Board of Directors decidesrecommends that you vote FOR the following: 3 Years 1 Year 2 Years Abstain The Board of Directors recommends that you vote 1 YEAR on the following: 3. To provide an advisory vote on the frequency of the vote on executive compensation. 5. To ratify the selection of the Company’s independent registered public accounting firm for 2023. To cumulate votes as to abandona particular nominee as explained in the foregoing amendment priorProxy Statement, check box to the filingright, then indicate the name(s) and the number of votes to be given to such certificatenominee(s) on the reverse side of amendment.
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TO VOTE,this card. Please do not check box unless you want to exercise cumulative voting. PLEASE MARK, BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E39431-P04414 KEEP THIS PORTION FOR YOUR RECORDS
DETACHSIGN, DATE AND PROMPTLY RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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USING THE ENCLOSED ENVELOPE. Please sign exactly as your name(s) appear(s) on this proxy. When signing as an attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
E39432-P04414
D99396-P86874 OFG BANCORP REVOCABLE PROXY This proxy is solicited on behalf of the Board of Directors of OFG Bancorp for use only at the annual meetingAnnual Meeting of shareholdersShareholders to be held on April 25, 2018,26, 2023, and at any adjournment or postponement of that Annual Meeting. This proxy may be revoked by the undersigned at any time before it is exercised.
The undersigned, being a shareholder of OFG Bancorp (the “Company”"Company"), hereby authorizes the Board of Directors of the Company or any successors in their respective positions, as proxies with full powers of substitution, to represent the undersigned at the annual meetingAnnual Meeting of shareholdersShareholders of the Company to be held at Oriental Center, 254 Muñoz Rivera Avenue, Ground Floor, San Juan, Puerto Rico,virtually on Wednesday, April 25, 2018,26, 2023, at 10:00 a.m. (EDT), and at any adjournment or postponement of that meeting, and thereat to act with respectwithrespect to all votes that the undersigned would be entitled to cast, if then personally present, as indicated on the reverse side.
In their discretion, the proxies are authorized to vote this proxy with respect to (i) the approval of the minutes of the last meeting of shareholders; (ii) the election of any person as director if any nominee is unable to serve or, for good cause, will not serve; (iii) matters incident to the conduct of the annual meeting;Annual Meeting; and (iv) such other matters as may properly come before the annual meeting.Annual Meeting. Except with respect to procedural matters incident to the conduct of the annual meeting,Annual Meeting, management at the present knows of no other business to be brought before the meeting other than those matters described in the accompanying proxy statement.
Shares of common stock of the Company will be voted as specified in this proxy.In the absence of any express indication that the shares to be voted should be cumulated in a particular fashion, the votes represented by executed proxies will be distributed equally among the threeseven nominees or in such other fashion as will most likely ensure the election of the nominees. If no specification is made on the reverse side, shares will be voted “FOR ALL”"FOR ALL" in Proposal 1: Election of Directors; “FOR”"FOR" Proposal 2: Advisory Vote on Executive Compensation; “FOR”"1 Year" on Proposal 3: Advisory Vote on Frequency of Vote on Executive Compensation; "FOR" Proposal 4:Amendment to Articles Eighth and Tenth of the Articles of Incorporation;2007 Omnibus Performance Incentive Plan; and “FOR”"FOR" Proposal 4:5: Ratification of Selection of Independent Registered Public Accounting Firm. This proxy cannot be voted for any person who is not a nominee of the Company’sCompany's Board of Directors.
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(If CUMULATE (If you noted cumulative voting instructions above, please check the corresponding box on the reverse side.)
*** Exercise 
YourRight Vote Counts! OFG BANCORP 2023 Annual Meeting Vote by April 25, 2023 11:59 PM ET OFG BANCORP C/O AMERICAN STOCK TRANSFER & TRUST CO. 6201 15TH AVENUE BROOKLYN, NY 11219 D99449-P86874 You invested in OFG BANCORP and it’s time to Vote ***Important Notice Regardingvote! You have the Availabilityright to vote on proposals being presented at the Annual Meeting. This is an important notice regarding the availability of Proxy Materialsproxy material for theShareholder Meeting shareholder meeting to Be Heldbe held on April 25, 2018.
26, 2023. Get informed before you vote View the Notice and Proxy Statement and Annual Report online OR you can receive a free paper or email copy of the material(s) by requesting prior to April 12, 2023. If you would like to request a copy of the material(s) for this and/or future shareholder meetings, you may (1) visit www.ProxyVote.com, (2) call 1-800-579-1639 or (3) send an email to sendmaterial@proxyvote.com. If sending an email, please include your control number (indicated below) in the subject line. Unless requested, you will not otherwise receive a paper or email copy. For complete information and to vote, visit www.ProxyVote.com Control # Vote Virtually at the Meeting* April 26, 2023 10:00 a.m. EDT Smartphone users Point your camera here and vote without entering a control number VirtuaOFG BANCORPOFG BANCORPC/O AMERICAN STOCK TRANSFER & TRUST CO.6201 15TH AVENUEBROOKLYN, NY 11219
Meeting InformationMeeting Type: Annual MeetingFor holders as of: March 2, 2018Date: April 25, 2018 Time: 10:00 a.m. (EDT)Location:Oriental Center 254 Muñoz Rivera Avenue Ground Floor San Juan, Puerto RicoYou are receiving this communication because you hold shares in the company named above.This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online atwww.proxyvote.comor easily request a paper copy (see reverse side).We encourage you to access and review all of the important information contained in the proxy materials before voting.See the reverse side of this notice to obtain proxy materials and voting instructions.
lly at: www.virtualshareholdermeeting.com/OFG2023 *Please check the meeting materials for any special requirements for meeting attendance. V1.1— Before You Vote —Howhe compensation of the Company’s Named Executive Officers as set forth in the accompanying Proxy Statement. For 1 Year 3. To 
provide an advisory vote on the frequency of the vote on executive compensation. For 4. To amend the 2007 Omnibus Performance Incentive Plan, as amended and restated. For 5. To ratify the selection of the Company’s independent registered public accounting firm for 2023. Prefer to Access the Proxy MaterialsProxy Materials Available to VIEW or RECEIVE:NOTICE AND PROXY STATEMENT ANNUAL REPORTHow to View Online:Have the information that is printed in the box marked by the arrow
(located on the following page) and visit:www.proxyvote.com.How to Request and Receive a PAPER or E-MAIL Copy:If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request:1) BY INTERNET: www.proxyvote.com2) BY TELEPHONE: 1-800-579-16393) BYE-MAIL*: sendmaterial@proxyvote.com* If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow (located on the following page) in the subject line.Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before April 11, 2018 to facilitate timely delivery.— How To Vote —Please Choose One of the Following Voting Methods
Vote In Person:Many shareholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting materials for any special requirements for meeting attendance. At the meeting, you will need to request a ballot to vote these shares.Vote By Internet: To vote now by Internet, go towww.proxyvote.com. Have the information that is printed in the box marked by the arrow (located on the following page) available and follow the instructions.Vote By Mail:You can vote by mail by requesting a paper copy of the materials, which will include a proxy card.Voting ItemsVote On DirectorsThe Board of Directors recommends that you vote FOR ALL of the following:1.To elect one director to serve until the 2019 annual meeting of shareholders and until his successor is duly elected and qualified:Nominee:01) Julian S. InclánAnd to elect one director to serve until the 2021 annual meeting of shareholders and until his successor is duly elected and qualified:Nominee:02) Pedro MorazzaniVote on ProposalsThe Board of Directors recommends that you vote FOR the following:2.To approve, on an advisory basis, the compensation of the Company’s Named Executive Officers as set forth in the accompanying Proxy Statement.The Board of Directors recommends that you vote FOR the following:3.To amend the Articles of Incorporation of the Company as set forth in the accompanying Proxy Statement.The Board of Directors recommends that you vote FOR the following:4.To ratify the selection of the Company’s independent registered public accounting firm for 2018.
