How to handle siding on a wall that's not flush?

Hi guys, first off thanks for any suggestions!
I pulled off the some old cedar lap siding on the rear of my house and after putting on some new foam insulation and sheathing, I noticed that (sorry if I get the name wrong) the rim joist between the first and second floors isn't flush with the lower floor walls. It's like the middle section of the house is bowed out about 1/2", not the entire length of the house, but only in a 4-6' section.

Now it appears to be very visible to me, but I never noticed it before. Is this anything to worry about, or should I just side right over it and assume no one would notice? I was thinking about adding a band board through that area, but now I'm thinking it might make it more noticible. I'm using cement board lap siding.

Thanks!