。
My mother said with a smile.
Literal
Mother [topic-は] smiling-[while-ながら] said-[polite-past-ました]
微笑みながら = 'while smiling' — the simultaneous ながら. 微笑む (ほほえむ) = to smile gently (more refined than 笑う). Attached to the verb stem, ながら marks two actions happening at the same time.