STM is slang for smiling to myself and is very similar to abbreviations like LOL (laugh out loud) and FTW (For The Win)It is one of the fastest growingly used words and next year will be added in the English dictionary.
Oh, and it is often mistaken for STI or STD (sexually transmitted infection/disease)
Nat.: Oh, remember that time with that teddy bear
Jess: Haha! STM :)