Putting it mildly, the year was off to a bad start for the banks as they faced a tough environment including concerns over the Chinese economic slowdown, continued volatility in commodity prices and the prevailing low and even sometimes negative interest rate scenario.Wall Street giant Citigroup Inc. C will report first-quarter 2016 results on Friday, Apr 15, 2016. The question is will the bank's performance suffer due to the challenges in the quarter.The New York based-bank’s fourth-quarter 2015 adjusted earnings beat the Zacks Consensus Estimate, driven by increased revenues, along with a significant decline in legal and repositioning costs. Also, the bottom line improved year over year.Interestingly, Citigroup delivered positive earnings surprises in the trailing four quarters with an average earnings beat of 5.06%. However, our quantitative model doesn’t call for an earnings beat this time. Also, the Zacks Consensus Estimate of $1.04 per share for the first quarter indicates a year-over-year decline of about 31.6%.Here is what our model indicates:Our proven model does not conclusively show that Citigroup is likely to beat the Zacks Consensus Estimate in the upcoming release. This is because a stock needs to have the right combination of the two key criteria – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) – for greater chances of an earnings surprise. Unfortunately, this is not the case here, as elaborated below.Zacks ESP: The Earnings ESP for Citigroup is +0.96%. This is because the Most Accurate Estimate of $1.05 stands above the Zacks Consensus Estimate of $1.04.Zacks Rank: However, Citigroup’s Zacks Rank #5 (Strong Sell) lowers the predictive power of ESP. We caution investors against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement.What to Expect in Q1The quarterly revenue might be affected by weakness in trading revenues. Last month, Citigroup’s Chief Financial Officer (CFO), John Gerspach, hinted at lower trading revenues for the quarter at a conference in New York. The CFO stated that trading revenue for the first quarter is expected to drop by 15% year over year, affected by elevated volatility. Following the broader trend of slump in investment banking revenues, Citigroup expects investment banking revenues to be down 25% year over year. The decline is primarily due to less issuance of debt and equity. The lower outlook follows pressure on spread products and other fixed-income products revenue along with maintenance of higher capital to meet regulatory requirements. Notably, the company has been trimming its workforce to offset revenue pressure to some extent.Regarding the Venezuelan government’s stance on changes to its foreign exchange controls, Citigroup estimates that it will incur around $172 million foreign currency loss in the first quarter, which could increase if Bolivar continues to devalue in the new SIMADI market.In mid December last year, the Federal Reserve raised interest rates for the first time in nearly a decade. The company should show a slight improvement in net interest margin (NIM) in first-quarter 2016 in reflection of the full quarter impact of the rate hike.Revenues from the consumer business in Asia and Latin America are expected to be relatively stable. Regarding mortgage activity, the company is likely to exhibit growth in originations, driven by decent refinance and purchase activity.However, the quarter is likely to record elevated costs on potential $400 million restructuring costs in infrastructure and capacity. Nevertheless, Citigroup’s continued efficiency in savings should ease some pressure on its expense base.The cost of credit for the corporate bank is expected to be $350 million in the first quarter, largely related to energy. Reserves on funded loans to the energy sector will be around 4.5%, with the level for non-investment-grade firms exceeding 10%.The activities of Citigroup during the quarter have not been able to win analysts’ confidence as reflected by 8 downward revisions in earnings estimates (versus no upward revision) over the last 60 days. Among the estimates that moved south, two were seen in the last seven days. The Zacks Consensus Estimate has been revised 31.1% downward over the last three months. Stocks that Warrant a LookHere are some stocks worth considering, as according to our model they have the right combination of elements to post an earnings beat this quarter.The Earnings ESP for BlackRock, Inc. BLK is +0.23% and the company carries a Zacks Rank #2. It is scheduled to release results for the first-quarter on Apr 14.PrivateBancorp, Inc. PVTB has an Earnings ESP of +1.75% and carries a Zacks Rank #3. It is expected to report first-quarter results on Apr 21.People's United Financial Inc. PBCT has an Earnings ESP of +4.76% and carries a Zacks Rank #3. It is slated to report first-quarter results on Apr 21.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CITIGROUP INC (C): Free Stock Analysis Report PRIVATEBANCORP (PVTB): Free Stock Analysis Report BLACKROCK INC (BLK): Free Stock Analysis Report PEOPLES UTD FIN (PBCT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research