    December 31, 2022, management determined that no valuation allowance was necessary. The valuation of current and deferred income tax assets and liabilities is considered critical, as it requires management to make estimates based on provisions of the enacted tax laws. The assessment of tax assets and liabilities involves the use of estimates, assumptions, interpretations, and judgments concerning certain accounting pronouncements and the federal tax code. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest rate risk is related to liquidity because each is affected by maturing assets and sources of funds. ChoiceOne’s Asset/Liability Management Committee (the "ALCO") attempts to stabilize the interest rate spread and avoid possible adverse effects when unusual or rapid changes in interest rates occur. The ALCO uses a simulation model to measure the Bank's interest rate risk. The model incorporates changes in interest rates on rate-sensitive assets and liabilities. The degree of rate sensitivity is affected by prepayment assumptions that exist in the assets and liabilities. One method the ALCO uses of measuring interest rate sensitivity is the ratio of rate-sensitive assets to rate-sensitive liabilities. An asset or liability is considered to be rate-sensitive if it matures or otherwise reprices within a given time frame. Table 5 documents the maturity or repricing schedule for ChoiceOne’s rate-sensitive assets and liabilities for selected time periods: Table 5 – Maturities and Repricing Schedule As of December 31, 2022 (Dollars in thousands) 0 - 3 3 - 12 1 - 5 Over Months Months Years 5 Years Total Assets Equity securities at fair value $ 8,566 $ - $ - $ - $ 8,566 Securities available for sale 101,285 15,385 36,210 376,869 529,749 Securities held to maturity 34,815 9,690 21,685 359,716 425,906 Federal Home Loan Bank stock 3,517 - - - 3,517 Federal Reserve Bank stock - - - 5,064 5,064 Loans held for sale 4,834 - - - 4,834 Loans 226,530 158,176 577,920 227,156 1,189,782 Cash surrender value of life insurance policies - - - 43,978 43,978 Interest rate derivative contracts 2,171 - 7,033 - 9,204 Rate-sensitive assets $ 381,718 $ 183,251 $ 642,848 $ 1,012,783 $ 2,220,600 Liabilities Interest-bearing demand deposits $ 638,641 $ - $ - $ - $ 638,641 Money market deposits 214,026 - - - 214,026 Savings deposits 427,583 - - - 427,583 Certificates of deposit 55,701 155,288 27,184 - 238,173 Borrowings 50,000 - - - 50,000 Subordinated debentures 3,795 - 32,500 - 36,295 Interest rate derivative contracts 5,823 - - - 5,823 Rate-sensitive liabilities $ 1,395,569 $ 155,288 $ 59,684 $ - $ 1,610,541 Rate-sensitive assets less rate-sensitive liabiliti Asset (liability) gap for the period $ (1,013,851 ) $ 27,963 $ 583,164 $ 1,012,783 $ 610,059 Cumulative asset (liability) gap $ (1,013,851 ) $ (985,888 ) $ (402,724 ) $ 610,059 Under this method, the ALCO measures interest rate sensitivity by focusing on the one-year repricing gap. ChoiceOne’s ratio of rate-sensitive assets to rate-sensitive liabilities that matured or repriced within a one-year time frame was 36% at