The parent of Territorial Savings Bank said today it plans to go public.

Territorial Mutual Holding Co. said it expects to issue 12.6 million shares that will be traded on the Nasdaq market.

The 87-year-old financial institution said it hopes to complete the offering by the first quarter next year, pending approval by regulators and the company's customers.

"This transaction will give our depositors the opportunity to share in the ownership of our institution and provide us more flexibility for growth opportunities," said Allan Kitagawa, Territorial's chairman and chief executive officer.

Depositors with a balance of at least $50 as of Sept. 30 will be eligible to purchase shares in what's known as a subscription stock offering. Once the offering is completed, shares will be traded on the Nasdaq market.

In a filing with the Securities and Exchange Commission last week, Territorial estimated the maximum offering price at $10 a share, meaning that the offering could raise as much as $125.6 million.

The company did not specify what the proceeds will be used for.

The offering comes at a time when U.S. banks and the IPO market have been hard-hit by turmoil in the credit markets. But like most other Hawai'i banks, Territorial doesn't have any direct exposure to the subprime market.