Central Pacific Bank plans to spend $40 million — its largest investment in nearly four decades — upgrading its technology and facilities.

The bank’s plans, called Rise2020, are expected to enliven its flagship downtown main branch by adding a new prototype branch and technology learning center called the Central Pacific Lab. Also coming are co-working spaces for small-business customers and nonprofits and an indoor-and-outdoor lanai that will provide meeting and retail opportunities.

Central Pacific said the lab is anticipated to open early next year. Construction improvements to the main branch, which will remain open during the renovations, are expected to be completed by early 2021.

Technological upgrades also are planned that will reach customers throughout the bank’s 35 branches and 78 ATMs statewide. Central Pacific said it will build new online and mobile banking platforms to make banking easier and quicker for customers and provide them with access to free financial management and educational tools. Starting in late 2019, the bank will begin rolling out a redesign of its website. It will be registered under the cpb.bank domain, which provides greater security than a commercially available domain.

Central Pacific also plans to replace most of its ATMs with full-service ATMs that dispense cash and accept cash and check deposits without envelopes.

David Morimoto, Central Pacific Bank executive vice president and chief financial officer and treasurer, said Rise2020 is Central Pacific’s largest investment since the circa-1954 bank built Central Pacific Plaza in 1982.

“The idea behind Rise2020 is that it’s an opportunity for us to rise in supporting our customers, the community and our employees, too. It’s critical that we make investments in technology,” said Catherine Ngo, Central Pacific Bank president and chief executive officer.

Ngo said transactions at bricks-and-mortar banks continue to decline; however, main branch improvements are aimed at today’s customers, particularly small businesses, that increasingly are looking for advice and networking opportunities. The lab will serve as a place for the bank to test technological products and train customers to take full advantage of new opportunities, she said. It will also serve as a place to train employees so that they can shift to higher-demand roles in the company, Ngo said.

The investments also are expected to bolster performance for Central Pacific Financial Corp., parent company of the state’s fourth-largest bank, which timed its Rise2020 announcement to the early morning release of its second-quarter earnings. The bank reported net income of $13.5 million in the second quarter. While results were down 4.9% from the year-earlier period, Ngo said it was a strong quarter which only dipped slightly because some Rise2020 expenses were incurred.

“Without the expenses we would have been up,” she said. “We see this as investing in the future of our company. The investments will improve the customer experience and will drive growth in more loans and deposits.”

Ngo said second-quarter loan growth hit $365.5 million, a 9.4% gain from the same period in 2018. Second-quarter core deposit growth was about $102.8 million, up 2.6% from 2018 results.

Morimoto said the bank’s credit quality also rose in the second quarter. Nonperforming assets, or bad loans, declined in the second quarter to $1.3 million, a 64% drop, Morimoto said.

“I’ve been here 25 years. I don’t remember it ever being that low before,” he said. “It’s only 0.02% of total assets.”

For the year, the bank reported a profit of $29.6 million, or $1.02 per diluted share, year to date through June 30, compared with a net income of $28.5 million, or 95 cents per diluted share, through the first six months of 2018.

Morimoto said with Rise2020 the bank has targeted a 15% return on average shareholders’ equity by the end of 2022. That’s up from the bank’s current 10% return on average shareholders’ equity, Morimoto said.

“We haven’t had a large profit improvement plan launched since 20 years ago,” he said.