HI,

Probably you upload too big logo image, remember this is WEB (!) do not use huge images like you used for print purposes. Or PHP settings problem.

Q: you can upload image using Joomla Media and then just select it using "Folders"

"Probably you upload too big logo image,": Just a logo png image of 19 Kb

You didn't mention about real file size in first post. Let's focus on the problem.

1. Are you able to upload that same or other even bigger file using Joomla Core Media Manager?
2. Do you have any limit of files on your hosting account?
3. Can you delete all (.jpg, .png) files from folder: images\banners - and try again.

And please change PHP settings inside cPanel > MultiPHP INI Editor > Memory_limit

If you have -1 (nolimit) then you have above problem, but if you set 128M or 256M or 512M (recommended) -- then should be fixed. Ask hosting support if you cannot find that setting.

Those are important steps to determine the source of the problem.