Start of by taking your graphic, I am going to be using this simple one I made of Kristen Stewart, Feel free to use that same one.

Make sure your graphic is on a transparent background, you choose this when you open a new canvas to begin

Now you've got your graphic open in photoshop, go to the left hand section where you choose your rectangular marguee tool, like shown below

Now carefully take you marquee tool and about a pixel away from all edges, make out the shape of your banner, so you should have a one pixel border going around the edge, something like this:

Now you've done that go to Select > Modify > Smooth Edges

Once you've done that you'll get a box pop up where you select how round you want your edges to be, I've chosen 35px

Once you've done that go to Select > Inverse

Now you should have something that looks like this

Now you can go to Edit > Cut or press CTRL + X, this will remove all your corners for you

Now you can see the checkered squares in the background show that it's transparent

To keep your transparent background then you must save your file as a .gif, Once you've saved it as a .gif and uploaded it you should have something like this

Tutorial © Copyright to Unwritten Designs, Picture Credited to original owner.