<PAGE>
 
                                                                    EXHIBIT 99.7

                       THE COMMONWEALTH OF MASSACHUSETTS


                               DIVISION OF BANKS
                         LEVERETT SALTONSTALL BUILDING
               100 CAMBRIDGE STREET, BOSTON, MASSACHUSETTS 02202


              APPLICATION FOR ACQUISITION OF A BANK BY A COMPANY
              --------------------------------------------------

     PURSUANT TO MASSACHUSETTS GENERAL LAWS CHAPTER 172, SECTION
26B, APPLICATION IS HEREBY MADE BY

                     APPLICANT:  CCBT Bancorp, Inc.
                                 -----------------
                       ADDRESS:  307 Main Street
                                 ---------------
                                 Hyannis, Massachusetts 02601
                                 ----------------------------

               MAILING ADDRESS,
                  IF DIFFERENT:  P.O. Box 1180
                                 -------------
                                 South Yarmouth, Massachusetts 02664-0180
                                 ----------------------------------------

                     TELEPHONE:  (508) 394-1300
                                 --------------

FOR WRITTEN APPROVAL OF THE COMMISSIONER OF BANKS TO ACQUIRE THE FOLLOWING BANK.

                     BANK TO BE
                      ACQUIRED:  Cape Cod Bank and Trust Company
                                 -------------------------------
                       ADDRESS:  307 Main Street
                                 ---------------
                                 Hyannis, Massachusetts 02601
                                 ----------------------------
                     TELEPHONE:  (508) 394-1300
                                 --------------

     THREE COPIES OF THIS APPLICATION MUST BE FILED WITH AN APPLICATION FEE IN 
THE AMOUNT OF $1,500.00 PAYABLE TO THE DIVISION OF BANKS.

                    APPLICATION
                   COORDINATOR:  Josefina R. Childress, Esq.
                                 --------------------------
                         TITLE:  Attorney
                                 --------
                       ADDRESS:  Goodwin, Procter & Hoar  LLP
                                 ----------------------------
                                 Exchange Place
                                 --------------
                                 Boston, MA 02109
                                 ----------------
                     TELEPHONE:  (617) 570-1374
                                 --------------
                          DATE:  December 7, 1998
                                 ----------------
<PAGE>
 
                            INTRODUCTORY STATEMENT
                            ----------------------

     CCBT Bancorp, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts ("Bancorp"), hereby applies to the Massachusetts
Commissioner of Banks ("Commissioner of Banks") pursuant to Massachusetts
General Laws, Chapter 172, Section 26B ("Section 26B") for approval of its
acquisition of all of the capital stock of Cape Cod Bank and Trust Company, a
Massachusetts-chartered trust company ("CCBT") (such acquisition hereinafter
referred to as the "Proposed Reorganization"). All factual information stated
herein has been provided by CCBT.

     As more fully discussed below, the Proposed Reorganization involves a
change in the corporate structure of CCBT by which Bancorp would become the
holding company of CCBT and a unitary bank holding company with its stock traded
on Nasdaq. CCBT believes a holding company structure provides more flexibility
to respond to market demands and thus will enable it to compete more effectively
against the much larger competitors that operate in its market.

Description of the Parties
--------------------------

     A.   Bancorp
          -------

     Bancorp was organized as a Massachusetts corporate subsidiary of CCBT on
October 8, 1998 for the sole purpose of becoming the holding company of CCBT in
accordance with Massachusetts law. Upon completion of the Proposed
Reorganization, CCBT will be a wholly owned subsidiary of Bancorp, and Bancorp
will thereby become a bank holding company.

     Bancorp currently is a shell subsidiary--it has no assets or liabilities
and does not conduct any business activity. When Bancorp becomes the holding
company of CCBT, its principal activities will be related to its ownership of
CCBT stock. In the future, upon receipt of all necessary regulatory approvals,
Bancorp may acquire banks or companies engaged in bank-related activities and
may engage in such activities as may be permitted by applicable law, although no
such activities or acquisitions are contemplated at this time. In any event, in
accordance with Section 26B, Bancorp will engage directly or indirectly only in
such activities as are now or may hereafter be proper activities for bank
holding companies registered under the Bank Holding Company Act of 1956 (the
"BHC Act").

     B.  CCBT
         ----

     CCBT is a Massachusetts-chartered commercial bank with trust powers. The
present bank is the result of the merger between Hyannis Trust Company and Cape
Cod Trust Company in 1964 and the resulting entity's subsequent merger with
Buzzards Bay National Bank in 1974. All of CCBT's facilities are located in
Barnstable County, Massachusetts. In addition to the main office located in
Hyannis, there are 25 other banking offices located in Brewster, Buzzards Bay,
Centerville, Chatham, Dennis, South Dennis, Falmouth, East
<PAGE>
 
Harwich, Harwichport, Hyannis, Mashpee, North Eastham, Orleans, Osterville,
Pocasset, Provincetown, Sandwich, South Yarmouth, Wellfleet and a Customer
Service Center that is located in South Yarmouth.

     CCBT has 3 wholly-owned subsidiaries: TBM Development Corporation, which
holds and manages certain non-performing loans; CCB&T Brokerage Direct, Inc., a
broker-dealer for customers' securities transactions; and CCBT Securities
Corporation, a securities corporation engaged exclusively in bank-permissible
buying and selling of securities.

     CCBT is the largest commercial bank headquartered in Barnstable County.
It offers a range of commercial banking services for individuals, businesses,
non-profit organizations, governmental units and fiduciaries. CCBT receives
substantially all of its deposits from and makes substantially all of its loans
to individuals and businesses on Cape Cod, Massachusetts.

     CCBT's principal sources of revenue are loans and investments, which
accounted for 80% of CCBT's gross income during 1997. Of the remaining portion
of revenues, 3% was received from service charges. The balance of revenues was
derived from Trust Department income and other miscellaneous items. Banking
services for individuals include checking accounts, regular savings accounts,
NOW accounts, money market deposit accounts, certificates of deposit, club
accounts, mortgage loans, consumer loans, safe deposit services, trust services,
discount brokerage and investment services. In the latter category, a
substantial amount of CCBT's business involves acting as agent to purchase U.S.
Government securities for its customers. CCBT also owns and maintains 30
automated teller machines that are connected to the TX, AMEX, CIRRUS, NYCE,
EXCHANGE, and PLUS networks. Trust Department services include estate, tax
returns, agency, investment management, discount brokerage, custodial services,
and IRA accounts. CCBT has no involvement in foreign countries and does not
derive any of its income from foreign sources.

     Upon completion of the Proposed Reorganization, CCBT will consider
conversion of its Massachusetts trust company charter to a national bank
charter.

     At September 30, 1998, CCBT had total assets of $1,201,130,000, total
deposits of $740,058,000, and total stockholders' equity of $82,741,000. For the
fiscal year ended December 31, 1997 and the nine month period ended September
30, 1998, CCBT had net income of $13,248,536 and $9,108,000, respectively. On
September 30, 1998, CCBT's leverage ratio was 6.89% and its Tier 1 risk-based
and total risk-based capital ratios were 11.44% and 12.67%, respectively. As a
result, CCBT is considered "well-capitalized" under applicable prompt corrective
action regulations. A copy of CCBT's most recent quarterly report on Form 10-Q
is attached hereto as Appendix H.
                      ----------

                                       2
<PAGE>
 
Description of the Transaction
------------------------------

     The Proposed Reorganization will be effected pursuant to a Plan of
Reorganization and Acquisition dated as of October 8, 1998, by and between
Bancorp and CCBT (the "Plan of Reorganization"), a copy of which is attached
hereto as part of Appendix A, in accordance with Section 26B./1/
                  ----------

     In accordance with Section 26B, the Plan of Reorganization was approved
by the Boards of Directors of Bancorp and CCBT on October 8, 1998 and by the
holders of more than two-thirds of the outstanding shares of CCBT's common stock
entitled to vote at a special meeting of CCBT's stockholders held on December 4,
1998. A copy of the proxy statement delivered to the stockholders in connection
with the Proposed Reorganization (the "Proxy Statement") is attached hereto as
Exhibit 1.
---------

     Under the Plan of Reorganization, Bancorp will become the owner of all the
outstanding shares of the common stock of CCBT, and each stockholder of CCBT who
does not exercise dissenters' rights with respect to the Plan of Reorganization
will become the owner of one share of Bancorp common stock for each share of
common stock of CCBT held immediately prior to the consummation of the Proposed
Reorganization. On the effective date of the Proposed Reorganization, each share
of common stock of CCBT will be automatically converted into and exchanged for
one share of Bancorp common stock.

     The number of shares of Bancorp common stock to be issued at the effective
time of the Proposed Reorganization will equal the number of shares of common
stock of CCBT issued and outstanding immediately prior thereto, less the number
of shares of common stock of

______________________

     /1/ The Plan of Reorganization provides that it shall not become effective
until all of the following shall have first occurred: (i) the Plan of
Reorganization shall have been approved by the affirmative vote of the holders
of two-thirds of the outstanding common stock of CCBT at a meeting of such
stockholders called for such purpose, (ii) the Plan of Reorganization shall have
been approved by the Massachusetts Commissioner of Banks and a copy of the Plan
of Reorganization with his approval endorsed thereon shall have been filed in
his office, all as provided in Section 26B, (iii) any approval, consent or
waiver required by the Board of Governors of the Federal Reserve System shall
have been received and any waiting period imposed by applicable law shall have
expired, (iv) CCBT shall have received a favorable opinion from its counsel,
satisfactory in form and substance to CCBT, with respect to the federal income
tax consequences of the Plan of Reorganization and the acquisition contemplated
thereby, (v) the shares of Bancorp common stock to be issued to the holders of
common stock of CCBT pursuant to the Proposed Reorganization shall have been
registered or qualified for such issuance to the extent required under all
applicable state securities laws, and (vi) CCBT and Bancorp shall have obtained
all other consents, permissions and approvals and taken all actions required by
law or agreement, or deemed necessary by CCBT or Bancorp, prior to the
consummation of the acquisition provided for by the Plan of Reorganization and
to Bancorp's having and exercising all rights of ownership with respect to all
of the outstanding shares of common stock of CCBT acquired by it thereunder.

                                       3
<PAGE>
 
CCBT held by dissenting stockholders./2/ The shares of Bancorp common stock that
are outstanding prior to the effective time of the Proposed Reorganization, all
of which are presently held by CCBT, will be cancelled as part of the Proposed
Reorganization.

     After consummation of the Proposed Reorganization, CCBT, as a subsidiary
of Bancorp, will continue to serve the communities it presently serves from its
existing office locations. In connection with the Proposed Reorganization, CCBT
currently intends to transfer up to $5 million to Bancorp in the form of a
capital contribution immediately prior to the effective date of the Proposed
Reorganization. If such a transfer to Bancorp had been made on September 30,
1998, the leverage, Tier 1 risk-based, and total risk-based capital ratios of
CCBT would have been approximately 6.49%, 10.73% and 11.97%, respectively. CCBT
would therefore continue to be considered "well-capitalized" under the
applicable prompt corrective action regulations.

     The Charter and By-laws of CCBT will not be affected in any material
respect by consummation of the Proposed Reorganization, and the Articles of
Organization and By-laws of Bancorp are substantially identical to those of
CCBT. The Cape Cod Bank and Trust Company 1997 Stock Option Plan will become a
plan of Bancorp. All other stock related benefit plans of CCBT will be unchanged
by the Proposed Reorganization, except that any plan which refers to the common
stock of CCBT, such as the Cape Cod Bank and Trust Company Employee Stock
Ownership Plan and Trust, will, following the completion of the Proposed
Reorganization, be deemed to refer instead to Bancorp common stock.

     The Directors, officers and other employees of CCBT will be unchanged by
the Proposed Reorganization. The Board of Directors of Bancorp will initially
consist of six of the fourteen persons currently serving as members of the Board
of Directors of CCBT. The President and Chief Executive Officer, Chief Financial
Officer and the Clerk of Bancorp will initially be the persons currently
serving, respectively, as President and Chief Executive Officer, Chief Financial
Officer and Secretary of CCBT.

     In accordance with Section 26B, the expenses in connection with the
Proposed Reorganization and the development of the Plan of Reorganization, in
the aggregate, will not exceed 2% of the capital stock, surplus account and
undivided profits of CCBT.

________________________

     /2/ No stockholders have asserted dissenters' rights following the
procedures set forth in Sections 86 to 98 of Chapter 156B of the Massachusetts
General Laws.

                                       4
<PAGE>
 
              APPLICATION FOR ACQUISITION OF A BANK BY A COMPANY
           UNDER MASSACHUSETTS GENERAL LAWS CHAPTER 172, SECTION 26B
           ---------------------------------------------------------

PART A
------

1.   A written plan of acquisition.
     -----------------------------

     A copy of the Plan of Reorganization is included in Appendix A attached
                                                         ----------
hereto.

2.   A statement addressing the issues of whether competition among banking
     ----------------------------------------------------------------------
     institutions will be unreasonably affected and whether public advantage
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     will be promoted.
     ----------------

     Effect on Competition
     ---------------------

     The Proposed Reorganization does not raise any competitive issues. The
Proposed Reorganization will not result in the addition of a new banking
presence to the markets presently served by CCBT or in the consolidation of
existing bank operations. CCBT's relative market share will not be altered by
the Proposed Reorganization. Following consummation of the Proposed
Reorganization, CCBT will continue to serve the same markets as it did prior to
the Proposed Reorganization and each of those markets will continue to be served
by a variety of significant financial institutions and will remain highly
competitive. Indeed, Barnstable County is adjacent to the Federal Reserve Board
defined "Boston Market," which includes the largest city in and financial
services focal point of New England.

     Rather than raising competitive concerns, it is expected that the Proposed
Reorganization will promote healthy competition in the geographic market areas
now served by CCBT. As in the remainder of the United States, the banking
industry in the area serviced by CCBT has experienced substantial consolidation,
with CCBT now facing significant competition from several competitors much
larger in asset size and deposits. The bank holding company structure will
provide flexibility for meeting the future financial needs of CCBT and
adequately responding to the increasing demands of the financial services
market.

     Public Advantage
     ----------------

     The Proposed Reorganization is expected to promote public advantage and
result in net new benefits in several respects. First, as a bank holding
company, Bancorp will not be subject to the same regulatory restrictions as
CCBT, and will be able to acquire and invest more freely in certain bank and
bank-related activities as well as such other activities as might be permitted
by regulatory authorities. Second, although no new consumer and business
services are currently contemplated, it is anticipated that the bank holding
company structure will facilitate the provision of new, wide ranging financial
services to consumers and businesses in CCBT's market areas in response to
market demands.

                                       5
<PAGE>
 
     The anticipated operating efficiencies, financial strength and flexibility
gained by the Proposed Reorganization should over time result in the following
other "net new benefits:" (1) capital investments; (2) job creation for
Massachusetts citizens; and (3) a continued commitment by CCBT to maintain and
open branches in its delineated local community, as market conditions warrant.

     As to capital investments, although no significant capital investments are
currently contemplated in connection with the Proposed Reorganization, CCBT and
Bancorp believe that the expanded business opportunities that will result from
the bank holding company structure and any operating efficiencies gained thereby
will lead to increased profits and retained earnings. This strengthened
financial position will help meet the lending demands of CCBT's communities and
enhance CCBT's ability to service the needs of both the citizens and the
businesses of its communities.

     As to job creation, Bancorp's ability to invest in certain bank and
bank-related activities may result in the expansion of its business, which could
translate into more job opportunities for Massachusetts citizens. Furthermore,
in addition to the potential for internal capital investments and job creation,
CCBT's contemplated enhanced ability to act as a source of financial services
for the communities it serves should assist the businesses and citizens in those
communities to expand and create jobs in their markets. This community benefit
is even further augmented by CCBT's commitment to the low and middle income
residents in those areas as demonstrated by its most recent satisfactory
Community Reinvestment Act rating.

     Finally, as to branch issues, CCBT has historically demonstrated its
commitment to maintain and open branches in its communities. No branch closings
are expected to result from the Proposed Reorganization. Instead, it is
anticipated that the flexibility and financial strength that will result from
the Proposed Reorganization will enable CCBT to continue to open or acquire
additional branches within its communities, as market conditions warrant.

     As the foregoing demonstrates, the Proposed Reorganization is anticipated
to have a positive effect on competition and is also anticipated to result in
public advantage, including net new benefits. More generally, the proposed
holding company structure is anticipated to permit Bancorp and CCBT to
effectively compete against competitors having a substantially larger percentage
of deposits in their markets.

3.   A statement on the financing plans for the company.
     --------------------------------------------------

     As mentioned in the Introductory Statement, in connection with the Proposed
Reorganization and in accordance with applicable law, CCBT currently
contemplates to transfer up to approximately $5 million to Bancorp. A transfer
of $5 million to Bancorp would reduce CCBT's stockholders' equity as of
September 30, 1998, to approximately $77.7 million. If such a transfer to
Bancorp had been made on September 30, 1998, the leverage, Tier 1 risk-based,
and total risk-based capital ratios of CCBT would have been approximately

                                       6
<PAGE>
 
6.49%, 10.73 % and 11.97%, respectively, resulting in its still being considered
"well- capitalized" under applicable prompt corrective action regulations.

     Attached as Exhibit 2 hereto is a table which sets forth (i) the
                 ---------
consolidated capitalization of CCBT as of September 30, 1998; (ii) the pro forma
                                                                       --- -----
consolidated capitalization of CCBT as of September 30, 1998 after giving effect
to the Proposed Reorganization (which reflects the proposed transfer of $5
million from CCBT's undivided profits to Bancorp); and (iii) the pro forma
                                                                 --- -----
capitalization of Bancorp on a consolidated basis after giving effect to the
Proposed Reorganization. Neither CCBT nor Bancorp plans to incur any debt in
connection with the Proposed Reorganization.

4.   A statement on the business objectives of the company.
     -----------------------------------------------------

     The Board of Directors of CCBT believes that a holding company structure
will provide flexibility for meeting the future financial needs of CCBT and
responding to competitive conditions in the financial services market. For
example, although no transactions are presently contemplated, the holding
company structure will facilitate the acquisition of other banks as well as
other companies engaged in bank-related activities if and when opportunities
arise. In this regard, a holding company structure would permit an acquired
entity to operate on a more autonomous basis as a wholly owned subsidiary of
Bancorp rather than as a division of CCBT. This more autonomous operation may be
decisive in acquisition negotiations. In addition, the stock of Bancorp might
serve as appropriate consideration in any such acquisition.

     Moreover, as a bank holding company, Bancorp will not be subject to the
same regulatory restrictions as CCBT, and will be able to acquire and invest
more freely in certain bank and bank-related activities as well as such other
activities as might be permitted by regulatory authorities. In addition, Bancorp
will not be subject to the same regulatory limitations on the amounts which it
can invest in its subsidiaries and other businesses and will not be required to
obtain regulatory approval before issuing shares of its capital stock, except
under certain circumstances. Furthermore, although CCBT is allowed to effect
stock repurchases under state law, such repurchases by CCBT would be subject to
regulatory approval under federal and Massachusetts banking laws while stock
repurchases by Bancorp would not require state or federal approval, except in
limited circumstances.

5.   Provide a copy of a prospectus and any other information describing the
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     transaction.
     -----------

     A copy of the Proxy Statement, which includes a description of the
Proposed Reorganization, is attached hereto as Exhibit 1.
                                               ---------

                                       7
<PAGE>
 
6.   Provide a corporate structure chart for the company and the bank which
     ----------------------------------------------------------------------
     includes any subsidiaries. Indicate the relational structure of the
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     corporate entities including all subsidiaries.
     ---------------------------------------------

     A copy of an organizational chart for Bancorp and CCBT, including CCBT's
subsidiaries, TBM Development Corporation, CCB&T Brokerage Direct, Inc. and CCBT
Securities Corporation, is attached hereto as Exhibit 3.

7.   Provide information on all required regulatory approvals necessary to
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     complete the transaction; include information on the status of each
     -------------------------------------------------------------------
     application and include a copy of any approvals received.
     --------------------------------------------------------

     In connection with the Proposed Reorganization, on October 26, 1998,
Bancorp filed a notice with the Federal Reserve Bank of Boston (the "Reserve
Bank") pursuant to Section 225.17 of Regulation Y (12 C.F.R. ss. 225.17) to form
a bank holding company (the "FRB Notice"). Subsequently, the Reserve Bank
informed Bancorp that the FRB Notice would be processed as an application under
delegated authority pursuant to Section 225.15 of Regulation Y (12 C.F.R. ss.
225.15) and requested certain additional information (the "FRB Comment Letter").
On November 12, 1998, Bancorp submitted a response to the FRB Comment Letter
(the "Response to FRB Comment Letter"). Copies of the FRB Notice and the
Response to FRB Comment Letter, excluding any confidential sections, are being
submitted in separately bound volumes.

PART B
------

     If applicable, submit a request for approval to acquire more than ten
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     percent of a savings bank or a co-operative bank in stock form pursuant to
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     209 CMR 33.08(6)(c) and include the date of such conversion.
     -----------------------------------------------------------

     This item is not applicable.

                                       8