Teresa Banks was a 17-year-old prostitute and cocaine addict. Her murder in Deer Meadow, Oregon, preceded that of Laura Palmer. Banks lived at the Fat Trout Trailer Park for a month, where Mrs. Chalfont and her grandson also lived until they moved away following Teresa's murder. She worked the night shift as a waitress at Hap's Diner.
A prostitute, Teresa Banks would submit ads to Flesh World, a swingers magazine. It was through such an advertisement that she received a call from a man who admired her picture he saw in Flesh World. She tells him to meet her at Red Diamond City Motel in room 123.After the two met at the motel, they planned to "party" with Teresa's friends, Ronette Pulaski and Laura Palmer, but he changed his mind.She went to Ronette and Laura following this, showing her ring to Laura.
Suspicious of his sudden change of heart, Teresa went to a payphone and called Jacques Renault and asked about Ronette and Laura's fathers. Confirming that the man was Laura's father, Leland Palmer. She lied to Jacques saying it was someone else and thanked him. She hung up, then called Palmer. However, before she could successfully blackmail Palmer, she was murdered at the Fat Trout Trailer Park, where she had lived for the previous month.
Her body was found, wrapped in plastic, in Wind River. Having no next-of-kin, her body was not claimed by anyone. FBI Agents Chester Desmond and Sam Stanley examined her body and determined that she died from "repeated blows to the back of the head by a blunt obtuse-angled object," and that the murderer took her ring from her finger. Stanley also discovered a small piece of white paper imprinted with the letter 'T' beneath the nail of her left ring finger.