meaning of update when value of hbm2ddl.auto set to update

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In configuration file i am using this

<property name="hbm2ddl.auto">update</property>

Although there was no table in my database, but still with the update command it creates the table in database.

what i thought that hbm2ddl.auto= "update" use only to update the schema and to create the same we use "create".

i am still confused how that table come into existence.

or update is the reason to create the table.

Please help

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Please refer to the attached image, tried documented as much as i can.

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