This is the content from the database:
<p><b>As the newly reborn Modbook Inc.</b> </p>
The actual output in the report page is the same (including the html tags).
<p><b>As the newly reborn Modbook Inc.</b> </p>
The expected output was bold text like:
As the newly reborn Modbook Inc.
From what I've seen you'll need to use a custom function. It looks like someone was trying to use that solution as recent as 19 March 2012. I see here on Kay Smoljak's blog that there is a property to handle some of the tags but I haven't tested it (and it's from almost 7 years ago, however considering the lack of popularity in report builder I doubt Adobe's done much to help the issue).
The mysterious HTML Formatted Text property
The latest build of the Report Builder included a new property for text objects – HTML Formatted Text (true or false). It’s not in the program help or in the livedocs. Basic HTML that I tried – paragraphs, Hx elements and strong elements – didn’t seem to work – the markup showed in the rendered report. Through a process of trial and error, I discovered that elements do work. Other presentation-style HTML such as the element probably also work.