Banks spent most of last season at Triple-A Portland, where he was 7-7 with a 3.46 ERA in 26 games (17 starts). He appeared in six games for the Padres last year and was 1-1 with a 7.15 ERA in six appearances (three starts).
"He had pretty good numbers last year in Triple-A Portland and is another quality arm we feel we can add to our depth," Astros assistant general manager Ricky Bennett said. "He will be in big league camp and will be competing for a spot in the rotation, and we'll try to get him innings out of the bullpen as the long guy. Once we get to camp and he has a couple of innings under his belt, we'll try to stretch him out and see how he fits."
Banks joins a group of non-roster pitchers invited to camp, including right-handers Roy Corcoran, Casey Daigle and Gary Majewski. Last month, the Astros also signed right-hander Ryan Sadowski to a Minor League deal, but he will instead pitch in Japan this year.
"We were having conversations with Banks all along knowing in the back of our minds that Sadowski may choose to go to Japan, and that's actually what happened," Bennett said. "We knew going into it that it was a possibility. We went ahead and signed him in the event that it worked itself out, but it wasn't a surprise for us."
It's not uncommon for free agents who are on the bubble between making a Major League club or going back to Triple-A to have clauses in their contracts that will allow them to go to Japan or Korea if they find work overseas.
"Last year, we had Jeremy Johnson pitching for us in Round Rock and he was throwing the ball well," Bennett said. "Korea called and said they had an interest, and we worked out a deal for Jeremy to pitch there the last two months of the season. They can go over there and make a little more money than they would if they were to go to Triple-A."
Meanwhile, Tuesday is the first day players can begin filing for salary arbitration. Houston has seven players eligible for arbitration -- center fielder Michael Bourn, infielder Jeff Keppinger, outfielder Hunter Pence, catcher Humberto Quintero and pitchers Tim Byrdak, Wandy Rodriguez and Chris Sampson.
Astros general manager Ed Wade doesn't anticipate any problems reaching deals with any of the arbitration-eligible players, and he doesn't plan on working on multiyear deals with rising stars Bourn, Pence and Rodriguez.
"At this point, our focus is going to be a year at a time," Wade said. "That could change, but at this point we think it's proven to stay short versus long. Our goal and our expectation is to get all of our eligible players signed and not have to go through the process itself."
The players and clubs can exchange salary figures Jan. 19. If no deal is reached, hearings will be held Feb. 1-21.
Brian McTaggart is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.