Where does the alternative use of "banner" come from? That is, how did it come to mean "outstanding"?
Banner is related to band (as in a band of cloth or a band of color across a cloth) and has long meant a distinctive flag around which a group (Dare I say "band"?) of people might rally. The OED traces the usage of banner as a flag of award and it's attributive sense of award-winning to 1840 in the US. The dictionary's cites include a "banner state," "banner plantation," and "banner crop" -- all meaning worthy of an award for excellence.
*Banner" meaning a type of newspaper headline (i.e., a band of large, distinctive type) doesn't show up (again in the US) until 1913,